Analysts believe that the low growth coupled with institutional and political constraints would make it challenging to achieve any material reduction in the government’s high debt burden.

Moody’s Buyers Service is downgrading the credit standing of France, saying the French financial system will develop slowly for the remainder of this decade whereas the nation’s debt stays excessive.

Moody’s said Friday the outlook for economic growth in France is weak, and it does not expect that to change soon.

“The combination of structurally weaker growth, low inflation, and a more than 30 percentage point increase in the debt/GDP ratio since the onset of the global financial crisis means that the shock absorption capacity of France’s balance sheet has weakened and is no longer expected to recover materially in the next three to five years”, the statement said. However, it raised the outlook to “stable” from “negative”, reports Xinhua news agency.

Paris: France’s finance minister reaffirmed the country’s commitment to economic reforms after ratings agency Moody’s cut French bond ratings by a notch to Aa2, citing continued weakness in the country’s medium-term growth outlook.

The French government has faced considerable opposition to its reform proposals this year. The public deficit is set to fall from 3.8 percent of gross domestic product in 2015 to 3.3 percent next year, before falling below the European Union-mandated threshold of 3 percent in 2017.

Investors have largely shrugged off downgrades, reflecting a shift to a focus on in-house analysis from reliance on ratings companies. It sees growth maxing out at a mere 1.5 per cent annual rate over the next few years.