Is France’s Sovereign Debt Heading Towards ’Junk’ Territory? - Investing.com UK

Is France’s Sovereign Debt Heading Towards ’Junk’ Territory? - Investing.com UK

Source: Investing.com UK

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DW NOTE

France's debt-to-GDP sits near 112% with a deficit running above 6%. Standard & Poor's already cut the rating to AA- in May, one notch above Fitch. A downgrade to BBB+ would still leave France investment-grade — "junk" starts three notches lower at BB+. The question is whether bond markets care about the label or the fiscal arithmetic, and the arithmetic says France cannot stabilise its debt stock at current primary deficits without either GDP growth it does not have or inflation it claims not to want.

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