France 'determined' to cut debt as Fitch maintains rating

PARIS

The French government has said that it would pursue efforts to cut debt after ratings agency Fitch maintained its AA- credit score on France's sovereign debt, but kept a negative outlook.

France's public debt soared during the COVID-19 pandemic and President Emmanuel Macron's government is struggling to find ways to put the country's public finances back on a stable footing.

The public deficit stands at six percent of GDP, well above the eurozone's limit of three percent, and well above the 4.4 percent recorded for 2023.

Fitch said that despite France's "vast and diversified" economy, cutting debt would be difficult given Macron's pledges to ramp up defence spending amid the lack of a parliamentary majority for his centrist party and allies.

"The government is determined to continue its efforts to consolidate public finances in line with the 2025 budget," the French Finance Ministry said in a statement, adding that "reducing our deficit is a priority."

Ratings agency S&P last month also maintained France's AA- credit score but revised down its economic outlook following pressure on the public finances and political strife over the country's budget.

That downgrade from stable to negative opened the door to a future demotion of France's sovereign debt rating from its current high-quality status, which would push up the cost of servicing France's mounting public borrowing.