Fitch Ratings has downgraded France’s credit rating from AA- to A+, citing political instability and uncertainty over managing rising public debt. The agency warned that without decisive action, France’s debt, currently at 113.2% of GDP, could reach 121% by 2027, and the deficit is unlikely to fall below 3% by 2029. The downgrade follows the ousting of Prime Minister François Bayrou after a failed budget plan.
Finance Minister Eric Lombard emphasized the strength of the economy and ongoing consultations to restore public finances, but economists note France’s high deficit and political fragmentation make fiscal consolidation difficult. Despite these concerns, inflation is low, unemployment is stable at 7.5%, and GDP growth is projected at 0.8% in 2025. Fitch also highlighted that domestic demand, high household savings, and solid corporate balance sheets could support the economy.
Germany and the Netherlands remain the highest-rated eurozone countries, while southern European nations like Italy have lower ratings. S&P Global is expected to update France’s outlook in November.
