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France’s credit rating downgraded amid political and financial uncertainty
France’s credit rating was downgraded on Friday by Fitch, one of the world’s major rating agencies, marking the lowest level the country has ever received from a top institution. The downgrade, from “AA-” to “A+”, highlights growing concerns over France’s mounting public debt and the political turmoil that has complicated efforts to stabilize the economy.
According to Fitch, France’s debt ratio is projected to rise from 113% of GDP in 2024 to 121% by 2027, without a clear strategy for long-term stabilization. The agency warned that this trajectory undermines the country’s ability to respond to future economic shocks.
The move comes shortly after the resignation of former prime minister François Bayrou, who lost a parliamentary confidence vote while attempting to push through an austerity budget. His departure has left President Emmanuel Macron with a fragile political base and a newly appointed prime minister, Sébastien Lecornu, who faces the daunting task of drafting a budget under a divided parliament.
Fitch also underlined that France’s budget deficit of 5.8% of GDP far exceeds the eurozone’s 3% ceiling, while its debt remains almost double the bloc’s 60% threshold. Rising yields on French bonds, now close to those of Italy, could further increase the cost of servicing debt, already described as “unbearable” by Bayrou.
While the government continues consultations with lawmakers to reach an agreement on the 2026 budget, the downgrade raises fears of additional cuts by other rating agencies, such as S&P Global, which is expected to review France’s standing in November.