Investment and consumption does not want France 3 a debt rating downgrade is inevitable

In France President Nicolas Sarkozy reminded the French should France lose AAA bond rating thought ready when France National Institute of statistics and economic studies (INSEE) recently published study on the economic situation report, confirming France economic situation is very grim, AAA debt rating downgrade is inevitable.

INSEE expects the European debt crisis, fourth quarter of this year France gross domestic product (GDP) contraction of 0.2%, down 0.1%,GDP in the first quarter of next year for two consecutive quarters of negative growth recession. This year France economic growth by about 1.6%, 0.15% lower than expected by the Government, the first half of next year we may experience a zero growth, is difficult for the whole year the Government expects economic growth of 1% goals. INSEE predicted that France will pick up in the unemployment rate, local unemployment rate next year reached 9.6%, together with the overseas departments will be reached 10%, more than in 2008-2009 financial crisis and recession. INSEE believes that business investment continues to decline, after the decline in the fourth quarter of this year 0.5%, 0.6% could decline in the first quarter of next year, continued to decline in the second quarter 0.1%. The next two quarters France only quarterly household consumption grew by 0.1%, investment and consumption do not want want to boost the economy.

Recently, three major international rating agency standard and poor 's, Moody's and Fitch raised downgraded France warning AAA debt ratings, one of the major reasons: first, France economic growth momentum. Since the beginning of the second quarter of this year, France quarter increase in GDP started to slide and economy growth in the first half of next year, even in a recession. Second was France excessive fiscal deficits and public debt. France budget deficit this year share of the GDP amounted to approximately 5.8%, public debt has reached 1.6461 trillion euros, accounted for 85.4% of its GDP, public debt next year is expected to be as high as 87%. Third, the European debt crisis that France banks face bankruptcy risk. According to statistics, Greece debt amounting to 400 billion euros, Italy debt amounting to Greece five times as much as France European pig held by the bank notes of the five countries most exposed, if their economies deteriorate, France dragged into the mire.

France observation post economic experts believe that the economic situation, France AAA debt rating downgrade is inevitable, if France continues to tighten the Government finances to achieve deficit reduction commitments, in 2013 fiscal deficits down to required by Europe's stability and Growth Pact objective of not exceeding GDP3%, France economic growth will be affected by the financial crunch, international rating agencies because France economic recession cut France rating. Assuming France regardless of budget deficit reduction commitments, and let go of financial support for economic development, international rating agencies will France public finances deteriorate downgraded France rating, two things will be able to keep France AAA bond rating.

Face the risks of recession and credit rating downgrade, France economic Minister said Baroin, the Government will stick to its goal of cutting public deficits. Sarkozy says France loses AAA sovereign credit rating, "will increase the country's difficulties, but this is not insurmountable. "France Foreign Minister Alain Jupp said, lose AAA bond rating for France, will not be catastrophic. But analysts believe that, once France ratings were down, will give the eurozone and France had serious negative impacts, France bond interest rates will rise, international investors more pessimistic about the future euro-area economic development, euro-dollar and other currencies could usher in a new round of decline.