Moody's holds France's credit rating at Aa3 despite political turmoil

Summarised from 2 outlets · Updated 24 Oct, 00:20 · Archive

Moody's has maintained France's credit rating at Aa3 despite political instability and rising bond yields.

Moody's maintained France's credit rating at Aa3 on Friday, preserving what the agency describes as a 'high grade' rating. The decision provided relief for Macron's government as the country contended with protests and rising political risk.

The rating agency kept a negative outlook on France, reflecting concerns about political fragmentation impairing the functioning of legislative institutions. Moody's noted that it could return France's outlook to stable if the country can narrow its deficit. The Financial Times reports that the agency assumes a 'deficit-reducing budget for 2027 will be adopted'.

France faces significant fiscal challenges. Its deficit-to-GDP ratio stands at roughly 5.5 per cent, well above the three per cent limit for European Union member states. The country's 10-year bond yield surpassed five per cent this week for the first time since 2002. France also faces more than one trillion dollars of debt maturing by 2030, and its debt-to-GDP ratio is expected to reach 121.7 per cent by 2027.

How it is being reported

• Moody's holds steady on France's credit rating as country grapples with turmoil and higher yieldsMoody's left its credit rating on France at Aa3, giving the country some relief in a week of unrest.CNBC · 23 Oct, 23:29
• France avoids downgrade from Moody’s in boost for Macron’s governmentRating agency retains Aa3 score as it assumes ‘deficit-reducing budget for 2027 will be adopted’Financial Times · 23 Oct, 23:28

In this story: France · Moody's · European Union · Macron

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