Paris, October 18 (QNA) - Credit rating agency Standard & Poor's (S&P) announced today that it has downgraded France's sovereign credit rating by one notch, citing ongoing strikes and mounting uncertainty over the country's fiscal policy. The rating has been lowered from "AA-/A-1+" to "A+/A-1" with a revised outlook upgraded from "negative" to "stable".

The downgrade reflects growing concerns over the government's ability to rein in its deteriorating public finances, amid social unrest and political gridlock. S&P noted that these challenges are hindering efforts to reduce the budget deficit.

The agency now forecasts that France's public debt will rise to 121 percent of GDP by 2028, up from an estimated 112 percent at the end of 2024.

In its report, S&P explained that the revised "stable" outlook balances two opposing factors: the continued rise in government debt and limited political consensus on the pace of fiscal consolidation, weighed against France's fundamental credit strengths as one of the eurozone's largest economies.

In response to the downgrade, French Finance Minister Roland Lescure emphasized the shared responsibility of both the government and parliament to pass the national budget before the end of the year. He underlined the importance of putting the deficit on a path back to the EU-mandated ceiling by 2029.

The downgrade follows a tense political week in France, during which newly appointed Prime Minister Sebastien Lecornu narrowly survived two confidence votes-setbacks that were largely attributed to the controversial pension reform plan that has sparked widespread public opposition. (QNA)