France’s credit rating was downgraded by Moody’s over the weekend, resulting from continuing weakness in the country’s medium-term growth outlook, ShareCast News reported. The ratings agency reduced the single currency nation by one level from “Aa1” to “Aa2”, but upgraded its outlook on the rating from “negative” to “stable”. Moody’s said: “The current economic recovery in France has already proven to be significantly slower–and Moody’s believes that it will remain so–compared with the recoveries observed over the past few decades.” It also blamed “the challenges that low growth, coupled with institutional and political constraints, poses for the material reduction in the government’s high debt burden over the remainder of this decade”. However, the agency stressed that France’s creditworthiness “remains extremely high”, thanks to its “significant” strengths, including a large, wealthy, and well-diversified economy with a high per capita income and its strong investor base and low financing costs.
