In brief
Fitch Holdings downgraded the outlook on France’s long‑term credit rating to negative while keeping the country’s long‑term issuer default rating at A+. The agency cited weaker economic growth, rising borrowing costs and a projected increase in France’s public debt‑to‑GDP ratio, amid political fragmentation and a challenging social environment.
Fitch Ratings downgraded France’s long‑term issuer default rating outlook to negative as of Friday, reaffirming the country’s A+ rating while citing weaker growth, higher borrowing costs and a widening budget deficit.
In a statement released in Paris on October 31, Fitch said the shift mirrors deteriorating debt dynamics since its August 2026 review, a move that reflects “weaker economic growth, higher borrowing costs and a wider budget deficit,” the report added.
Fitch lowered its forecast for France’s real GDP growth to 0.5 percent for 2026 and 0.9 percent for 2027, down from earlier projections of 0.8 percent and 1.1 percent. The downgrade follows preliminary data showing France’s GDP contracted 0.1 percent in the third quarter of 2026, a decline cited by the agency as evidence of further downside risk.
With respect to fiscal dynamics, the Fitch report notes that France’s budget deficit is expected to reach 6.4 percent of GDP in 2027 without additional consolidation measures, up from a prior projection of 5.9 percent. Its latest 2027 draft budget targets a deficit of 5.0 percent, relying on measures that are politically difficult to implement.
Fitch also adjusted its debt‑to‑GDP ratio forecast, now predicting the ratio to rise to about 124 percent by 2028, compared with the previous estimate of 122.7 percent. The agency highlighted that many public spending items are difficult to cut politically, and a high tax burden limits the ability to raise further revenue.
Fitch highlighted the political context, noting persistent fragmentation and a challenging social environment, which it said hampers sustained fiscal consolidation. Despite these concerns, the report points to France’s large, wealthy and diversified economy, strong institutions, euro area membership and a resilient banking sector as anchoring factors that support the A+ rating level.
Fitch’s outlook shift follows the agency’s assessment that France’s debt dynamics have weakened from an already weak starting point, reflecting the cumulative impact of the country’s economic and fiscal fundamentals.
Key among Fitch’s concerns is the interplay of a sluggish economy, rising borrowing costs and a growing fiscal deficit, all of which bolster fears the public debt may outpace economic growth in the coming years.
While Fitch maintains France’s credit rating at A+, the move signals prudence amid an environment marked by political fragmentation, social stresses and high public spending. Investors and policymakers will likely monitor how France’s policy choices influence the trajectory of its public debt, fiscal consolidation, and long‑term growth moving forward.