Login ID:
Partner Login
Contact Us : 7066511911

Press Release: S&PGR Reports On French LRGs' Budgetary Prospects

10 Oct 2017 8:01 am
The following is a press release from Standard & Poor's: 
     -- In 2016, and for the second year in a row, France's LRGs were a major 
contributor to the reduction in the general government deficit, thanks to 
strong budgetary results that were better than we expected. 
     -- We consider that financial trends in the French LRG sector will be 
more favorable through to year-end 2018 than we previously forecast, on 
account of relatively fast-growing operating revenues and LRGs' strong grip 
over operating expenditures. 
     -- We could see some volatility in the sector after 2018, owing to 
institutional and cyclical uncertainties. 
     -- French LRGs continue to enjoy access to external funding at 
competitive costs, with record-low rates for short-term funding. 
PARIS (S&P Global Ratings) Oct. 10, 2017--French local and regional 
governments (LRGs) made a strong contribution to the 0.2 percentage point 
reduction in the general government deficit in 2016, despite cuts in central 
government transfers for the third year running. 
According to a report published today by S&P Global Ratings titled "French 
Local And Regional Governments' Budgetary Prospects Should Continue To Improve 
Following Outperformance In 2016," the consolidated budget outturns of French 
LRGs--that is, cities, intercities, departments, and regions--were better than 
S&P Global Ratings' forecasts in February this year. 
LRGs slightly increased their operating balance to 14.5% of operating revenues 
from 13.9% in 2015. At the same time, they posted a consolidated surplus after 
capital accounts of 0.9%, compared to our forecast of a deficit of slightly 
more than 1.0% of total revenues. 
The following three factors led to the stronger budgetary performance in 2016: 
     -- A 0.5% increase in operating revenues from 2015, despite state 
transfer cuts, compared to our expectation of 0.1% growth. This was the result 
of growing fiscal revenues, including in particular 8% growth in departments' 
property transfer fees; 
     -- A tight grip on spending, resulting from French LRGs' close budgetary 
monitoring. LRGs reported a 0.2% drop in operating expenditures from 2015, 
compared to our February 2017 estimate of 1.0% growth; and 
     -- A drop in capital spending of more than 3% compared to 2015, whereas 
we had anticipated a slight recovery. Consolidated capital expenditure is now 
close to EUR45 billion after falling below EUR50 billion in 2015. 
We expect that the budgetary upswing will continue, and as such, have revised 
upward our expectations for French LRGs' budgetary prospects for 2017 and 
2018. We now forecast that their consolidated operating balance should average 
about 15% of their operating revenues for 2017-2018, compared to our previous 
forecast of a gradual reduction to less than 13% of operating revenues in 2018. 
Underlying the more favorable trend we see for French LRGs' budgetary 
prospects for 2017 and 2018 are our expectations of higher operating revenues 
and lower operating expenditures (opex). Higher operating revenues reflect 
higher actual figures in 2016, and relatively buoyant fiscal revenues. 
Our expectation of lower opex reflects lower actual figures in 2016. In 
2017-2018, we expect that French LRGs will tightly control growth of 
opex--especially with regard to goods and services and personnel--and as 
spending related to the minimum income benefit for the poor decelerates 
quickly and lower interest rates reduce financial costs. 
Only a rating committee may determine a rating action and this report does not 
constitute a rating action. 
The report is available to subscribers of RatingsDirect at 
www.globalcreditportal.com and at www.spcapitaliq.com.  If you are not a 
RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 
212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings 
information can also be found on the S&P Global Ratings' public website by 
using the Ratings search box located in the left column at 
www.standardandpoors.com.  Alternatively, call one of the following S&P Global 
Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office 
(44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; 
Stockholm (46) 8-440-5914; or Moscow (7) 495-783-4009. 
Primary Credit Analysts: Ghita Lamriki, Paris +33144206709; 
                         Christophe Dore, Paris (33) 1-4420-6665; 
                         Romuald Goujon, Paris (33) 1-4475-2547; 
                         Loic Le Mercier, Paris; 
                         Mehdi Fadli, Paris (33) 1-4420-6706; 
Research Assistant: Leo Renaudin, Paris +33144206704; 
No content (including ratings, credit-related analyses and data, valuations, 
model, software, or other application or output therefrom) or any part thereof 
(Content) may be modified, reverse engineered, reproduced, or distributed in 
any form by any means, or stored in a database or retrieval system, without 
the prior written permission of Standard & Poor's Financial Services LLC or 
its affiliates (collectively, S&P). The Content shall not be used for any 
unlawful or unauthorized purposes. S&P and any third-party providers, as well 
as their directors, officers, shareholders, employees, or agents (collectively 
S&P Parties) do not guarantee the accuracy, completeness, timeliness, or 
availability of the Content. S&P Parties are not responsible for any errors 
or omissions (negligent or otherwise), regardless of the cause, for the 
results obtained from the use of the Content, or for the security or 
maintenance of any data input by the user. The Content is provided on an "as 
shall S&P Parties be liable to any party for any direct, indirect, incidental, 
exemplary, compensatory, punitive, special or consequential damages, costs, 
expenses, legal fees, or losses (including, without limitation, lost income or 
lost profits and opportunity costs or losses caused by negligence) in 
connection with any use of the Content even if advised of the possibility of 
such damages. 
Credit-related and other analyses, including ratings, and statements in the 
Content are statements of opinion as of the date they are expressed and not 
statements of fact. S&P's opinions, analyses, and rating acknowledgment 
decisions (described below) are not recommendations to purchase, hold, or sell 
any securities or to make any investment decisions, and do not address the 
suitability of any security. S&P assumes no obligation to update the Content 
following publication in any form or format.  The Content should not be relied 
on and is not a substitute for the skill, judgment, and experience of the 
user, its management, employees, advisors, and/or clients when making 
investment and other business decisions. S&P does not act as a fiduciary or 
an investment advisor except where registered as such. While S&P has obtained 
information from sources it believes to be reliable, S&P does not perform an 
audit and undertakes no duty of due diligence or independent verification of 
any information it receives. 
To the extent that regulatory authorities allow a rating agency to acknowledge 
in one jurisdiction a rating issued in another jurisdiction for certain 
regulatory purposes, S&P reserves the right to assign, withdraw, or suspend 
such acknowledgement at any time and in its sole discretion. S&P Parties 
disclaim any duty whatsoever arising out of the assignment, withdrawal, or 
suspension of an acknowledgment as well as any liability for any damage 
alleged to have been suffered on account thereof. 
S&P keeps certain activities of its business units separate from each other in 
order to preserve the independence and objectivity of their respective 
activities. As a result, certain business units of S&P may have information 
that is not available to other S&P business units. S&P has established 
policies and procedures to maintain the confidentiality of certain nonpublic 
information received in connection with each analytical process. 
S&P may receive compensation for its ratings and certain analyses, normally 
from issuers or underwriters of securities or from obligors. S&P reserves the 
right to disseminate its opinions and analyses. S&P's public ratings and 
analyses are made available on its Web sites, www.standardandpoors.com (free 
of charge), and www.ratingsdirect.com and www.globalcreditportal.com 
(subscription), and may be distributed through other means, including via S&P 
publications and third-party redistributors. Additional information about our 
ratings fees is available at www.standardandpoors.com/usratingsfees. 
Any Passwords/user IDs issued by S&P to users are single user-dedicated and 
may ONLY be used by the individual to whom they have been assigned. 
No sharing of passwords/user IDs and no simultaneous access via the same 
password/user ID is permitted. To reprint, translate, or use the data or 
information other than as provided herein, contact Client Services, 
55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: 
Copyright (c) 2017 by Standard & Poor's Financial Services LLC. 
All rights reserved. 

(END) Dow Jones Newswires

October 10, 2017 04:01 ET (08:01 GMT)
Top 5 Special Reports
Canada's 2020-21 Pea Production May Rise Rise Marginall...
USD/INR (Jan. 20) Testing Short-term Resistance near...
USD/INR (Jan. 20) Testing a Resistance Zone Near 71....
Urad Spot(Chennai INR): Bullish Breakout from a Base/ P...
Urad Spot(Burma USD): Appears Poised for More Strength/...