Yahoo.co.uk: Fitch removes French AAA rating
Yahoo.co.uk news: French lost its last AAA rating from major rating agency on Friday. This is a serious blow to the president Hollande, whose government is trying to control public finances and stimulate the sluggish economy into growth.
Fitch downgrades one level of the France national credit rating to AA +, who pointed out that the French debt outlook is deteriorating and economic environment is uncertain, because of the comeback risk of the eurozone crisis.
French economy slides into mild recession in the first quarter. Earlier last year, Standard & Poor's and Moody's have removed France's AAA rating.
Fitch mentioned in explaining its downgrade reasons that it has many reasons to worry about, including France's weakening economic output, jumped unemployment, budget deficit and weak external demand.
Fitch said in a statement that the risk of fiscal outlook aspects "mainly based on the downside". The outlook for new rating is stable.
"Chronically high debt ratio reduces the leeway of negative impact of fiscal digestion cushion." Fitch said.
Fitch extends the time estimate that required from France for debt reduction. Fitch thinks that debt ratio relative to Gross Domestic Product (GDP) will hit a high of 96% next year. It will still up to 92% in 2017.
