Standard and Poor's on Friday affirmed France's AA+ rating, citing the governments commitment to budgetary and structural reforms which would improve the country's growth potential.

The rating agency confirmed its long-and short-term sovereign credit ratings on France at 'AA+/A-1+'. It also maintained its long-term outlook at 'negative', and said that there is at least a one-in-three chance that the ratings could be lowered in 2013.

Growth prospects could deteriorate further if authorities fail to significantly overhaul the labor market and services sectors, the budget deficit remains close to current levels, or the financing and economic risks in the Eurozone significantly increase France's contingent liabilities. Such a scenario could lead a downward revision of the rating, the agency said.

S&P said that the French economy is expected to expand 0.4 percent in real terms in 2013, helped by the government's ongoing implementation of its consolidation plan, which is underpinned by substantial reforms. The general government deficit is forecast to be 4.5 percent of GDP this year, and 3.5 percent in 2013.

"We view France as a sovereign benefiting from a wealthy, highly diversified, and resilient economy with a skilled and productive labor force and a high rate of savings," the agency said.

The agency cautioned that structural rigidities in the labor market, relatively restrained competition in some services sectors, and the overall high tax burden pose challenges to the French economy.

Though the reform measures proposed so far are useful they are insufficient enough to significantly unlock the growth potential. Also, business growth is unlikely to improve substantially without deeper labor and services-sector reforms, S&P said.

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