/RATINGS: Citi Do Not Expect Any Rating Move From S&P On France Near-Term

Citi note that “S&P will review France’s AA rating on Friday. It was put on a negative outlook in December.”

• “The agency envisages a downgrade:
• 1)If the debt/GDP ratio does not decline over 2023-25 (something our economists don’t foresee until 2027).
• 2)On a lack of structural reforms (on this front, the pension reform should be a positive).
• 3)If general government interest payments increase above 5% of revenue (which our economists don’t expect).
• 4)If there is a prolonged economic slowdown (which is now less of a concern than December when they assessed France, but productivity has not recovered).”
• “On balance, our forecasts don’t suggest any change to rating/outlook in the near-term. This should mean limited market impact from tomorrow’s decision.”