S&P lowers France credit outlook to 'negative'

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New York • Standard & Poor's Rating Services on Friday lowered its outlook for France's credit rating to "negative" from "stable," saying the country's economic picture is dimming.

S&P maintained France's rating at "AA" — two notches below the firm's highest investment grade. But the lowered outlook indicates the rating could be downgraded sometime in the next two years if France's economy deteriorates, the firm said.

The French economy may run into trouble because the government may not be able to implement reforms need to spur growth, S&P said.

The firm lowered its projections for France's economic growth over the next three years and predicted that government deficits will take up a larger portion of the country's gross domestic product.

S&P expects France's nominal GDP to grow at an average of 2 percent from 2014 to 2017, down from its previous estimate of 2.5 percent.

France's "AA" rating, however, is supported by the country's productivity, its high per-capita income, low levels of household debt, and high levels of private-sector domestic savings, S&P said.