Fitch Downgrades France Economic Outlook to Negative

International rating agency "Fitch" lowered on Friday France's economic outlook from "stable" to "negative" in light of the expected deterioration in public finances, including expectations for sovereign debt due to the novel coronavirus (COVID-19) pandemic.

However, Fitch said in a statement that it still maintains France's long-term credit rating at "AA" at the present time.

Fitch added that the revised forecast reflects the significant deterioration in public finances and economic activity expected this year due to the epidemic.

"The combination of much reduced economic activity due to containment measures introduced from March and government policies to support the economy in the period of enforced reduced activity will sharply increase government borrowing and indebtedness."

Meantime, the combination of significantly reduced economic activity due to the preventive measures introduced since March and government policies to support the economy in the current period will sharply increase government borrowing and debt.

France made little progress since 2008: Fitch

"The deterioration of French public finances comes at a time when its debt levels were relatively high and when it made only limited progress in fiscal consolidation since the 2008 global financial crisis, Fitch pointed out, adding that it has two more years in which it may downgrade France's debt rating.

Last April, US rating agency S&P (previously Standard & Poor's) maintained France's credit rating at "AA" and outlook at "stable".