Summary Moody's cut France's sovereign debt rating one notch to Aa2 on Friday.
WASHINGTON (AFP) - Moody s cut France s sovereign debt rating one notch to Aa2 on Friday, saying the country will struggle with slow growth and a high debt burden for the next five years.
"The current economic recovery in France has already proven to be significantly slower -- and Moody s believes that it will remain so -- compared with the recoveries observed over the past few decades," Moody s said.
"France faces material economic challenges, such as a high rate of structural unemployment, relatively weak corporate profit margins and a loss of global export market share that have their roots in long-standing rigidities in its labour and product markets," Moody s said.
The result will be slow growth over the medium term that will stand in the way of "any material reversal in France s elevated debt burden in the foreseeable future," the agency said.
The downgrade was by one notch from the previous Aa1 rating. France lost its top-flight Aaa rating in November 2012 as the eurozone sank into crisis, and the new rating is two steps below that.
Moody s said that overall France s credit-worthiness "remains extremely high" and gave the new rating a "stable" outlook.
Supporting that is "the country s efforts to stabilize its public sector finances and initiatives recently deployed or announced to arrest the erosion of the economy s competitiveness."
