Category: 3. Business

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Standard & Poors on Friday cut France’s credit rating on expectations that its debt will rise higher than previously anticipated in the coming years, heaping pressure on Prime Minister Sébastien Lecornu’s budget plans. 

S&P is the third rating agency to downgrade France in about a month, and comes just days after Lecornu secured a fragile government at the expense of pausing President Emmanuel Macron’s proposed pensions reforms. 

Lowering France’s credit rating from AA- to A+ with a stable outlook, S&P said it expects France would succeed in hitting its 5.4 per cent budget deficit target for this year. But “in the absence of significant additional budget deficit-reducing measures, the budgetary consolidation over our forecast horizon will be slower than previously expected,” it said late on Friday night. 

With the spread between French and German bonds widening in recent weeks, the downgrade is likely to further increase France’s borrowing costs.

The agency said it expects government debt to reach 121 per cent of GDP in 2028, compared with 112 per cent of GDP at the end of last year. It expects conditions in the Eurozone’s second-largest economy to remain uncertain ahead of hotly anticipated presidential elections in 2027. 

France was plunged into political crisis when President Macron called and lost snap elections in June 2024, producing no clear majority in parliament. Lecornu is his fourth different prime minister since the vote, with his predecessors being voted out by opposition groups over disagreements on how to handle France’s ballooning public debt pile. 

Lecornu — a close ally of Macron — resigned from the post of premier and was reappointed in the space of a week, highlighting France’s deepening political instability. 

He survived his first confidence votes on Thursday thanks to an abstention of most of the centre-left Socialist party, but the result came at the cost of suspending Macron’s landmark structural reform on pensions. The freeze will cost €400mn in 2026 and €1.8bn the following year.

Ahead of the votes, Lecornu argued with opposition parties to allow his government to pass a budget to bring the deficit to below 5 per cent next year. 

He urged lawmakers to negotiate over his proposed €30bn package of tax rises and spending cuts rather than resorting to more challenges to his premiership. 

S&P said the 2027 election “casts doubt” on whether France will be able to implement fiscal consolidation measures in the medium term — or whether the country would achieve the 3 per cent of GDP budget deficit target by 2029 it had pledged to the EU. 

Reacting to the downgrade, finance minister Roland Lescure said it was “now the collective responsibility of the government and parliament to adopt a budget that meets this [5.4 per cent] target before the end of 2025”.

Effective policy action helped steer Europe through a strong post-pandemic rebound, though the recovery is now moderating as the region faces renewed headwinds. At the International Monetary Fund (IMF) 2025 Annual Meeting, Alfred Kammer, Director of the IMF’s European Department, cautioned that the region is transitioning into a period of weaker medium-term growth.

“The pandemic and the energy crisis were huge shocks. And because of good policymaking, we entered into a recovery, and recovery unfolded as we expected. And, what we see is now the end of that recovery. And the end of that recovery goes into the medium-term, dismal, mediocre growth for Europe; that is what we have been predicting. Second point to make: on the short-term, the recovery is being driven by higher real wages and their supporting consumption, lower interest rates are providing support to investment spending, and we are facing new headwinds since earlier this year. And they come from trade tensions and geopolitical tensions. And when you’re looking at our short-term forecast for this year, they have been influenced by frontloading, as a response to these tariff threats earlier on, before they became available. And, when we’re looking at the impact of trade tariffs and uncertainty for [20]25-[20]26, they are going to shave off growth by 0.5% cumulatively. And they are only partially offset by higher infrastructure spending projected for Germany, and higher defense spending,” cautioned Kammer.

As the recovery slows, policymakers are advised to turn their attention from managing near-term momentum to consolidating policy gains. This recommendation comes against the backdrop of the euro area and European Central Bank’s success in bringing inflation under control, which has helped stabilize the monetary environment.

“We have reached the inflation target and it looks like we have reached that, durably. And what it means for ECB monetary policy that, they can stay at a terminal rate of 2%. And our recommendation for the ECB is to only change the policy rate if or when material shocks strike, which would materially change the inflation outlook. A slightly different situation in the CC [Central and Eastern European Countries] countries where inflation is still 1 to 3 percentage points above target; there is still a risk of the anchoring of inflation expectations. And therefore, CC countries need to be more cautious in the disinflation effort; they need to remain data-dependent, meeting-by-meeting and need to ease only gradually,” advised Kammer.

As inflation pressures ease across much of Europe, the focus shifts to the deeper reforms needed to lift Europe’s weak growth trajectory. Policymakers are urged to tackle long-standing constraints by reducing intra-European trade barriers, advancing deeper capital markets through a Capital Markets Union, improving labor mobility, and developing an energy union to enhance affordability and stability. These priorities are essential to strengthening competitiveness and resilience across the region.

“Europe has excellent examples in place on what to do and how to do it. We put these reforms together and they would – the Euro level reforms first step, and structural reforms domestically – they would actually give a boost to the level of GDP over 10 to 15 years by 9%; that’s a large number. Use the European budget in order to incentivize reform. Use the European budget to actually generate savings for the European public goods. And those are public investments into R&D; those are public investments into energy and into defense – because a coordinated approach will overall provide savings and will provide a more effective system. We add a big message this time to our REO [Regional Economic Organizations], and that is, you also need to focus on fiscal consolidation. The package on the European reform and on the structural reforms that is going to create – when implemented – a lift in productivity, it will increase the income of Europeans, and it provides resilience, and it will also help on the fiscal consolidation side,” predicted Kammer

But reform alone won’t shield Europe from mounting fiscal pressures. Long-term spending demands tied to aging-related healthcare, pensions, digital transformation, the energy transition, and higher borrowing costs are projected to steadily push debt levels higher. Without meaningful fiscal adjustment, public debt would double over the next 15 years, driving the average debt ratio across Europe to around 130% of GDP. Stabilizing debt levels will require a clear and credible fiscal consolidation path.

“Do the structural reform and the productivity-enhancing measures, because they will not only increase your income, they will also be a considerable contribution to the fiscal adjustment effort; and they could lower the fiscal adjustment requirement over the next five years, by one third to one half of the efforts. So, a huge and important contribution to make from these. So, all clear. And, also, I would say when you talk to European policymakers: very much agreed by all of them. And it’s always in the implementation, and to overcome the political economy, resistance. And that’s a really, really tough part to do. And we are trying to support the European policymakers in creating a narrative, because you need to discuss this with the population. We are providing numbers on the huge benefits of actually acting. And, policymakers need to find ways to overcome these obstacles and act. And our view is: Europe can act, Europe must act, and Europe must do so now,” concluded Kammer.

Effective policy action helped steer Europe through a strong post-pandemic rebound, though the recovery is now moderating as the region faces renewed headwinds. At the International Monetary Fund (IMF) 2025 Annual Meeting, Alfred Kammer, Director of the IMF’s European Department, cautioned that the region is transitioning into a period of weaker medium-term growth.

“The pandemic and the energy crisis were huge shocks. And because of good policymaking, we entered into a recovery, and recovery unfolded as we expected. And, what we see is now the end of that recovery. And the end of that recovery goes into the medium-term, dismal, mediocre growth for Europe; that is what we have been predicting. Second point to make: on the short-term, the recovery is being driven by higher real wages and their supporting consumption, lower interest rates are providing support to investment spending, and we are facing new headwinds since earlier this year. And they come from trade tensions and geopolitical tensions. And when you’re looking at our short-term forecast for this year, they have been influenced by frontloading, as a response to these tariff threats earlier on, before they became available. And, when we’re looking at the impact of trade tariffs and uncertainty for [20]25-[20]26, they are going to shave off growth by 0.5% cumulatively. And they are only partially offset by higher infrastructure spending projected for Germany, and higher defense spending,” cautioned Kammer.

As the recovery slows, policymakers are advised to turn their attention from managing near-term momentum to consolidating policy gains. This recommendation comes against the backdrop of the euro area and European Central Bank’s success in bringing inflation under control, which has helped stabilize the monetary environment.

“We have reached the inflation target and it looks like we have reached that, durably. And what it means for ECB monetary policy that, they can stay at a terminal rate of 2%. And our recommendation for the ECB is to only change the policy rate if or when material shocks strike, which would materially change the inflation outlook. A slightly different situation in the CC [Central and Eastern European Countries] countries where inflation is still 1 to 3 percentage points above target; there is still a risk of the anchoring of inflation expectations. And therefore, CC countries need to be more cautious in the disinflation effort; they need to remain data-dependent, meeting-by-meeting and need to ease only gradually,” advised Kammer.

As inflation pressures ease across much of Europe, the focus shifts to the deeper reforms needed to lift Europe’s weak growth trajectory. Policymakers are urged to tackle long-standing constraints by reducing intra-European trade barriers, advancing deeper capital markets through a Capital Markets Union, improving labor mobility, and developing an energy union to enhance affordability and stability. These priorities are essential to strengthening competitiveness and resilience across the region.

“Europe has excellent examples in place on what to do and how to do it. We put these reforms together and they would – the Euro level reforms first step, and structural reforms domestically – they would actually give a boost to the level of GDP over 10 to 15 years by 9%; that’s a large number. Use the European budget in order to incentivize reform. Use the European budget to actually generate savings for the European public goods. And those are public investments into R&D; those are public investments into energy and into defense – because a coordinated approach will overall provide savings and will provide a more effective system. We add a big message this time to our REO [Regional Economic Organizations], and that is, you also need to focus on fiscal consolidation. The package on the European reform and on the structural reforms that is going to create – when implemented – a lift in productivity, it will increase the income of Europeans, and it provides resilience, and it will also help on the fiscal consolidation side,” predicted Kammer

But reform alone won’t shield Europe from mounting fiscal pressures. Long-term spending demands tied to aging-related healthcare, pensions, digital transformation, the energy transition, and higher borrowing costs are projected to steadily push debt levels higher. Without meaningful fiscal adjustment, public debt would double over the next 15 years, driving the average debt ratio across Europe to around 130% of GDP. Stabilizing debt levels will require a clear and credible fiscal consolidation path.

“Do the structural reform and the productivity-enhancing measures, because they will not only increase your income, they will also be a considerable contribution to the fiscal adjustment effort; and they could lower the fiscal adjustment requirement over the next five years, by one third to one half of the efforts. So, a huge and important contribution to make from these. So, all clear. And, also, I would say when you talk to European policymakers: very much agreed by all of them. And it’s always in the implementation, and to overcome the political economy, resistance. And that’s a really, really tough part to do. And we are trying to support the European policymakers in creating a narrative, because you need to discuss this with the population. We are providing numbers on the huge benefits of actually acting. And, policymakers need to find ways to overcome these obstacles and act. And our view is: Europe can act, Europe must act, and Europe must do so now,” concluded Kammer.

This article first appeared on GuruFocus.

Coca-Cola (NYSE:KO) could be the next global heavyweight to tap India’s sizzling IPO market. The beverage giant is in early talks with bankers about a potential listing of its bottling arm, Hindustan Coca-Cola Beverages Pvt., a deal that may raise around $1 billion and value the business near $10 billion, according to people familiar with the matter. While no advisors have been formally appointed, discussions have gained momentum, and the listingif it proceedscould take shape next year. The timing and structure remain under consideration, suggesting Coca-Cola is still testing investor appetite before committing.

The India unit has become one of Coca-Cola’s biggest growth engines, serving over two million retailers and employing more than 5,000 people. Headquartered in Bengaluru, the bottler operates 14 manufacturing plants across 12 states, anchoring the company’s presence in the southern and western regions of the country. Coca-Cola recently sold a minority stake in the unit’s holding company to local conglomerate Jubilant Bhartia Group, a move viewed by investors as part of a broader effort to deepen Indian partnerships and prepare the ground for a potential public offering.

If the deal moves forward, Coca-Cola would join a wave of multinational names turning India into their listing arena of choicefollowing LG Electronics’ $1.3 billion float and Hyundai Motor’s record $3.3 billion debut. With Mukesh Ambani’s Reliance Jio also preparing its own market entry, the next phase of India’s IPO boom could extend into 2026. For global investors, Coca-Cola’s move signals not just corporate confidence in India’s growth story but also the market’s evolution into a preferred launchpad for global consumer giants.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A Manhattan jury has found BNP Paribas liable for more than $20mn in damages to three Sudanese refugees after a trial over its role in banking the war-torn African nation’s ruling regime, in a case that could set the stage for far larger claims against it.

Lawyers for the refugees accused BNP Paribas of enabling human rights abuses, in a rare case of a global bank facing a jury trial for such allegations. It emerged from the French bank’s own 2014 guilty plea to criminal charges of processing blacklisted funds from Sudan and other sanctioned countries through the US financial system, for which it paid a $9bn penalty.

The refugees alleged BNP played a direct role in an “organised campaign of destruction” by Sudan’s former ruler, the dictator Omar al-Bashir, in the late 1990s and 2000s. They accused the bank of supporting Bashir’s government by giving it access to US financial markets and “petrodollars”, enabling it to buy weapons that it used against its populace as a result of oil revenue.

“The bank provided a blank cheque to the regime, which it used to perpetrate a reign of death and destruction on that targeted population,” said Michael Hausfeld, a lawyer for the refugees. “The bank knew of the genocidal use and chose to turn a blind eye of indifference to that human consequence.”

The bank was on Friday found liable of damages worth $7.3mn, $6.7mn and $6.75mn, to each of the three respective plaintiffs. But the initial case sets the stage for a series of future trials over allegations of forced displacement and human rights violations, including torture and rape.

The so-called bellwether verdict could open the door to potentially far more damages, as thousands of additional victims line up to assert claims. More than 20,000 Sudanese refugees were members of the class of victims certified in the case, according to Hausfeld, one of the law firms that represented them.

Pressure on BNP to settle the case would rise “for amounts much higher than we’ve estimated”, said Elliott Stein, a litigation risk analyst at Bloomberg Intelligence. “We don’t rule out a settlement in the low billions.”

BNP said it “believes that this result is clearly wrong” and had strong grounds for appeal. The verdict was “based on a distortion of controlling Swiss law and ignores important evidence the bank was not permitted to introduce”, it added. BNP also said it “should not have broader application beyond this decision” and only applies to the three plaintiffs.

The verdict against France’s largest bank comes after the trial started in New York last month, almost a decade after the case was first filed.

Sudan was rocked by several civil wars during Bashir’s rule that led to millions of deaths and displacements. He was charged by the International Criminal Court in The Hague with crimes against humanity, including war crimes, murder, torture and genocide, for turning the government’s armed forces against civilians in the course of a campaign against rebel groups. He was deposed in a coup in 2019.

The approval expands the use of the drug, Tezspire, as an add-on maintenance treatment of inadequately controlled chronic rhinosinusitis with nasal polyps in adult and pediatric patients aged 12 years and older.

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The condition causes the sinuses to stay inflamed for 12 weeks or more and soft, noncancerous growths called polyps to form in the nose. Symptoms include facial pain, reduced sense of smell and nasal congestion.

Tezspire is already approved as a single-use pre-filled syringe in the U.S., EU and other countries for add-on maintenance treatment for severe asthma.

The approval is based on the results from a late-stage study in which the drug showed clinically meaningful reduction in the size of nasal polyps and reduced nasal congestion compared to placebo.

Tezspire also reduced the number of patients needing surgery for nasal polyps by 98% and reduced the need for oral steroids by 88%, the data showed.

Tezspire, chemically known as tezepelumab-ekko, is a monoclonal antibody that blocks TSLP — a key protein involved in triggering and sustaining inflammation linked to severe asthma and related conditions.

The approval “shows the versatility of TSLP inhibition beyond asthma and highlights both companies’ commitment to take a really important scientific insight and way to treat patients into broad application that can make a real difference for patients,” said Kate Chevlen, global commercial head of inflammation portfolio at Amgen.

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Pakistan’s gold holdings have emerged as a key driver of the country’s strengthening reserves, soaring in value as global bullion prices rally more than 50% in 2025.

According to data from Topline Securities and the State Bank of Pakistan (SBP), the country’s gold reserves are now valued at nearly $9 billion, up sharply from previous years. This surge has pushed Pakistan’s total reserves, including the liquid foreign exchange assets, to around $23.4 billion, placing them near all-time highs.

“On average, over the last 10 years, gold made up about one-third of Pakistan’s liquid reserves. Now, it is closer to two-thirds – a major shift, reflecting how global gold strength is reinforcing Pakistan’s external buffers,” noted Topline Securities CEO Mohammed Sohail.

Analysts attribute the rally to a combination of global factors: investor flight to safe-haven assets amid geopolitical uncertainty, central bank buying, and sustained inflationary pressures. For Pakistan, the windfall comes as a timely boost to its financial buffers following years of external stress.

While the SBP’s gains are largely valuation driven rather than cash inflows, the rising value of gold reserves is cushioning Pakistan’s economy and supporting the rupee in the backdrop of lingering fiscal and trade challenges.

Furthermore, gold prices in Pakistan skyrocketed to a new all-time high on Friday, defying the global trend, where bullion slumped amid a stronger US dollar and easing safe-haven demand.

According to data released by the All Pakistan Sarafa Gems and Jewellers Association, the price of 24-karat gold surged by Rs14,100 per tola, reaching a historic high of Rs456,900. Similarly, the 10-gram gold price rose by Rs12,089 to settle at Rs391,718.

In contrast, the international gold market witnessed a sharp pullback, where prices fell by more than 2% after touching a record high of $4,300 per ounce earlier in the session. The decline was triggered by a rebound in the US dollar and remarks by US President Donald Trump, who said that a “full-scale tariff” on China would be unsustainable, easing investor fears of a prolonged trade war.

Spot gold was down 2.6% at $4,212.99 per ounce at 12:39 pm ET (1639 GMT), after scaling an all-time high of $4,378.69 earlier in the session, according to Reuters. The metal breached $4,300/oz for the first time on Thursday, and is set for a weekly gain of about 5%. US gold futures for December delivery were down 1.8% to $4,225.80.

At the end of Friday’s trading session, the Pakistani rupee remained stable against the greenback and settled at 281.10. It has depreciated by 0.91% CYTD and appreciated by 0.95% FYTD, according to Ismail Iqbal Securities.