(Boursier.com) – The rating agency Standard & amp; Poor’s confirmed the rating ‘AA’ in France, but deteriorates ‘stable’ to ‘negative’ view of the country. S & amp; P considers that the fiscal position is deteriorating as well as its growth prospects. “We believe that because of the risks associated with the policy of fiscal consolidation and structural reforms, a cover of the French economy could be difficult to achieve,” said the rating agency. For Standard and Poor’s, “public finances of France could deteriorate beyond 2014,” which justifies its revised outlook negative. Michel Sapin, the French Minister of Finance and Public Accounts, “notes the decision by Standard and Poor’s” and minimizes the decision, defending the French choice of “staying the course.”
Degradation perspective
Standard & amp; Poor’s affirmed its long-term credit rating of France to ‘AA’ rating in 2012 The short-term sovereign credit rating of France is affirmed at ‘A-1 +’. However, the rating agency degrades “stable” its outlook which augurs the possibility of a downgrade of France in the next 24 months. If Standard & amp; Poor’s recognizes that the financial sector is well capitalized, well regulated, and therefore unlikely to generate fiscal costs, risks come from low economic growth and policy implementation. “In line with our previous assumptions, the government would miss its budget targets in 2014 In addition, even with the new methodological treatment of tax credits, the expected shift for 2014 is higher than expected while revenue are lower than expected “
Poor France
Just like Moody’s in September, S & amp;. P highlights the loss of France. “We are now planning the French public deficit for 2014-2017 to 4.1% of GDP on average, against 3.2% in April this year. Meanwhile, we have reduced our forecast average real economic growth to 1 , 2% over the period 2014-2017 against 1.3% previously, “said the rating agency. Over the period, Standard and Poor’s lowered its forecast for average nominal GDP to 2% over the period (2.5% in April). The rating agency evaluates the French public debt to 98% of GDP in 2017 (95.5% in the previous analysis), for a net debt to 92% of GDP by that time (89% in the previous estimate). In conclusion, S & amp; P continues to “anticipate a modest cyclical recovery, with real GDP growth of 0.5% in 2014, 1.1% in 2015 and 1.5% in 2016-2017, against an average of 1 % in 2010-2013. “
Quality of the signing of the French State
A Bercy, the discourse tends to minimize the decision to impose perspective ‘negative’ of France Standard and Poor’s. Michel Sapin interpreted this announcement as a reaffirmation of “the quality of the signing of the French state.” The Minister for Finance and Public Accounts insist trust capital of France, recalling: “The French debt is among the safest and most liquid in the world, with a load of debt very contained.” Based on “the confidence of investors,” Michel Sapin defends “a coherent economic strategy, the government intends to pursue.”
Keep the reform course
Minister reaffirms policy options and structural economic choice of French State … “The economic situation is having on our balanced budget, but the government has chosen to stay the course. We implement the financial savings and the Pact of responsibility and solidarity, to regain competitiveness. We will continue the reforms needed to sustain growth in the medium term. In a recovery situation still too weak and unusually low inflation in the eurozone, that each country should take responsibility and that a coordinated European economic policy is conducted in the service of growth. “
– © 2014 Boursier.com
No comments:
Post a Comment