Ratings agency Fitch downgraded France's sovereign credit rating, warning that President Emmanuel Macron's reform agenda could stall after a dramatic increase in the country's retirement age despite massive protests..

Eurozone's second-largest economy downgraded one notch to AA- with a stable outlook.

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The president's party does not have a parliamentary majority and may struggle to meet other priorities, such as increasing employment and reducing the budget deficit while improving public services, such as school education..

Fitch also notes that the government's use of a constitutional tactic known as Article 49. 3, to pass the unpopular pension reform without a vote in parliament could "

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" She underestimates the impact of the structural reforms adopted in the past few months by the French government, in particular the reform of insurance for the unemployed, pensions and taxes on production,"

Fitch expects France's fiscal deficit to be 5 percent of GDP this year on weaker growth and higher inflation-driven spending, up from 4.7% in 2022.

France's economy grew 0.2% in the first three months of the year despite strikes, but inflation also rose in April to 5.9% year on year.

France's fiscal performance is "

Protests and strikes against pension reform have rocked France since January. Following Macron's signing of a law to raise the retirement age from 62 to 64, some smaller protests are still ongoing, with unions planning a major protest march on May 1.