By Stephen Nakrosis
S&P Global Ratings said Friday it was revising its outlook on France to negative from stable and also lowered its 2023 GDP growth forecast for the country to 0.2% from an earlier 1.7% estimate.
S&P also said it was affirming the nation's 'AA/A-1+' sovereign credit ratings.
S&P said its outlook reflects "our view of rising risks to France's public finances and the resulting reduction in fiscal space." The agency raised its budget deficit forecast to 5.4% of GDP from 4%, "with the latter averaging 4.9% over 2023-2025 versus 3.6%, and general government debt rising to 112% of GDP by 2025."
S&P said "France's slowing economy and government measures to cushion households and businesses from energy inflation will weigh on public finances."
The rise in energy prices since the start of the war in Ukraine may be a "much longer lasting shock to European economies than the temporary fall in demand triggered by the Covid-19 pandemic in 2020," S&P added.
Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
(END) Dow Jones Newswires
12-02-22 1715ET
