Fitch placed France’s AA+ rating on ratings watch negative.

  • They cite a material increase in budget deficit targets
  • See a peak in debt-to-GDP in 2017 at 99.7%
  • Risks to outlook remain on the downside
  • Outlook for the French economy has deteriorated

The agency’s latest forecasts show wider fiscal deficits into the medium term, with a deficit of 3.3% of GDP in 2017, a negative variance of more than 1.5ppt compared with our previous projection. The French government’s own forecasts show material deviations from prior forecasts. Previously, they had projected the deficit to fall to 1.3% of GDP by 2017. This has been revised up to 2.8% in the latest projections.

Their next scheduled review is Dec 12, 2014 so that’s when France will likely be downgraded.

France affirmed

In September, Fitch affirmed France’s Aa1 rating but shifted its outlook to negative.