Fitch sees worsening in France's accounts and puts A+ rating at risk

Fitch Ratings maintained France's credit rating at A+, but changed the country's outlook from stable to negative. According to Times Brasil, the decision indicates that French public accounts are worsening and that the rating is now at risk.

The agency did not downgrade the rating. Times Brasil reminds us that a change in perspective does not equate to an immediate downgrade, but signals a greater chance of a cut in a future assessment. Fitch's statement, according to the same publication, came on Friday, the 30th.

To justify the change, the agency cites three factors: weaker economic growth, high financing costs and a persistent deficit. In Fitch's assessment, these elements are worsening the trajectory of French debt. The country's fiscal outlook has also deteriorated since the August review.

The situation, however, did not start now. Times Brasil reports that France's fiscal situation was already considered fragile before this worsening. Added to this scenario is the expectation that debt interest will occupy a larger share of the economy, even though the report does not provide values ​​for this projection.

What is at stake is Paris' ability to finance its debt without sacrificing growth. For those who defend fiscal responsibility, the case reinforces a familiar lesson: persistent deficits take their toll, and the cost usually appears first in interest.

What changes for the investor

For those who operate the stock market, Nasdaq, interest rates and the dollar, the effect tends to be indirect and starts with French debt securities, which may become more sensitive to fiscal news. A negative outlook usually increases investors' attention to the issuer's risk, and the agency's next reviews become a monitoring point. It is worth monitoring the evolution of the deficit, the trajectory of debt interest rates and the pace of growth, which are the three factors cited by Fitch.

Automatically translated from Portuguese.