Fitch puts negative outlook on France's rating

PARIS (Reuters) -Credit ratings agency Fitch revised France's outlook to "negative" from "stable" on Friday, citing increases in fiscal policy and political risks.

"This year's projected fiscal slippage places France in a worse fiscal starting position, and we now expect wider fiscal deficits, leading to a steep rise in government debt towards 118.5% of GDP by 2028," Fitch said in a statement, while maintaining France's rating at "AA-".

France's public finances have sharply deteriorated this year as tax income fell short of expectations and spending exceeded them, leaving French debt at risk of a ratings downgrade.

The government presented a 2025 budget on Thursday that aims to reduce the hole in the public finances by 60 billion euros ($65.5 billion) through spending cuts and tax hikes focused on the wealthy and big companies.

"The 2025 budget that we just presented reflects the government's determination to put the public finances on a better path and get debt under control," Finance Minister Antoine Armand said in a statement.

Fitch said that high political fragmentation and a minority government complicate France's ability to deliver on getting its public finances on a sounder footing.

(Reporting by Rupali Chaudhary and Leigh Thomas; Editing by Shreya Biswas and Sandra Maler)

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