Moody's Investors Service on Friday downgraded France's sovereign rating to Aa2 from Aa1, citing the continued weakness in the country's medium-term growth outlook. "The main driver of Moody's decision to downgrade France's government bond rating to Aa2 is the increasing clarity, in Moody's view, that French economic growth will remain low over the medium term, and the obstacle that this will pose for any material reversal in France's elevated debt burden in the foreseeable future," the agency said in a statement. The current economic recovery in France is slower than others in the past few decades, partly because it has lost competitive power and growth potential following the 2008 financial crisis, it said. The country is also grappling with a high unemployment rate, weak corporate profit margins and a loss of global export market share. Moody's revised its outlook on the rating to stable, which means it does not expect to change it in the next 12 to 18 months.
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