Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

S&P says outlook for France negative, holds AA rating  Join our daily free Newsletter

MENAFN - AFP - 23/11/2012

No. of Ratings : 0
Add to Mixx!


 


(MENAFN - AFP) Standard and Poor's held to a downgraded AA rating for France and said the outlook remained negative on Friday, four days after Moody's cut its top rating for the country by one notch and warned that more could come.

S&P, which downgraded France from top notch in January, referring to recent French announcements on the economy, said although the government was "determined to carry out budgetary and structural reforms" France's long-term outlook was "negative."

"After flat growth this year, we believe that the French economy will grow by 0.4 percent in real terms in 2013," it said, but expressed concern over "wavering consumption levels, rising unemployment, and decelerating wages."

However, S&P said it thought that the government would press on with important structural reforms despite internal opposition from vested interests.

But it also said that reforms, announced in recent weeks, to spur the competitiveness of French industry, including a corporate tax credit for firms' payrolls, were "useful but insufficient to significantly unlock economic growth potential."

The statement said that "labour and service-sector reforms would be positive for competitiveness, economic growth, and, in turn, sovereign creditworthiness."

This week, rating agency Moody's became the second of the three major ratings agency to cut France's top-notch triple A rating, noting it down to "Aa1".

France has not run a balanced budget since the 1970s.

The S&P statement used a slightly more optimistic tone about the outlook for reforms being carried through than had Moody's.

Moody's said that although recent announcements in France went in the right direction, a legacy of 20 years of difficulty by successive governments in reforming the economy hung over the outlook.

The economy has been stumbling along at almost zero growth for about a year but in the last quarter rallied to show a gain of 0.2 percent, the same level as in Germany where the economy had been resilient but has been hit by a slowdown in business activity.

The third main rating agency, Fitch, still gives France a top-notch rating but has said it will take another look at how France is doing.

Ratings are vital tools for vast sectors of the financial and investment industries since they assist investors in categorising investments by class of risk.

Contracts between investment funds and their savers, and investment principles for insurance companies, mean that as debt bonds issued by a country are downgraded they may fall step by step out of the criteria permitting an investor to invest in the instruments affected.


 






  MENA News Headlines


 
Click to Apply






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help