Morningstar DBRS turns negative on France's credit rating

This week, Morningstar DBRS downgraded its outlook on France's creditworthiness. The agency has once more cautioned the market about the mounting debt challenges faced by the nation, as Bloomberg reports. Increased military spending and the potential for geopolitical unrest make this country a poor choice for investment. 

Such an outlook change reflects France's greater likelihood of meeting commitments to reduce its large budget deficit, Morningstar DBRS said. 

The agency has recently downgraded the nation’s credit rating from AAA to AA. That means the country's assessment remains high, but is slightly less positive. S&P, Moody's and Fitch have a similar rating, two notches lower, Bloomberg notes. 

Lately, the new French government has finally passed a delayed financial bill. The legislation aims to reduce the government's budget deficit from a projected 6% in 2024 to 5.4% in 2025. The original plan was to reduce the deficit to 5%.