Moody’s Investors Service has downgraded France’s credit rating by one rung, citing issues that include weakness in the nation’s medium-term growth outlook, reports The Wall Street Journal.
Moody’s changed its outlook for France to stable from negative.
The rating was cut to Aa2 from Aa1.
Moody’s said it believes low medium-term growth will be an “obstacle” for “any material reversal in France’s elevated debt burden in the foreseeable future”.
The rating firm said “France’s credit worthiness remains extremely high” and said the nation has “a large, wealthy and well-diversified economy.” Moody’s said France has a relatively favorable demographic profile and its working-age population isn’t expected to contract over the long term.
In 2012, Moody’s and Standard & Poor’s Ratings Services stripped France of triple-A ratings
S&P in June affirmed its AA/A-1+ rating for France while maintaining a negative outlook. Fitch Ratings affirmed its AA rating in June, with a stable outlook.
French finance Minister Michel Sapin on Wednesday said economic growth will accelerate in 2016 and the government will meet its pledges to reduce the budget deficit.