In brief
On October 31, Fitch Ratings changed France’s long‑term IDR outlook from stable to negative, citing a combination of slower growth, higher borrowing costs and a widening budget deficit. The agency maintained France’s A+ rating but warned that a large share of public spending is politically difficult to cut and that the debt‑to‑GDP ratio could rise to about 124 % by 2028. France’s 2027 budget deficit may reach 6.4 % of GDP if no additional consolidation is undertaken, leaving fiscal consolidation uncertain amid political fragmentation and social challenges.
On Friday, Fitch Ratings announced that it had shifted France’s long‑term issuer default rating (IDR) outlook from stable to negative, while affirming the country’s rating at A+. The agency said the change reflects weaker economic growth, higher borrowing costs and a widening budget deficit since its August 2026 review, together undermining France’s debt dynamics from an already fragile starting point.
Fitch noted that persistent political fragmentation and a challenging social environment have made it more difficult for France to achieve sustained fiscal consolidation. "France’s large, wealthy and diversified economy, strong institutions, membership in the euro area and resilient banking sector continue to support the rating," the report said, but added that the debt burden remains a serious concern.
In its update, Fitch lowered GDP growth forecasts to 0.5 % for 2026 and 0.9 % for 2027, down from 0.8 % and 1.1 % previously issued. The downgrade was based on weaker economic data in the first half of 2026. France’s GDP contracted 0.1 % in the third quarter of 2026, according to preliminary data released on Friday by the French National Institute of Statistics and Economic Studies (INSEE). Fitch said the contraction underscored downside risks to its growth forecast.
The agency also revised its debt‑to‑GDP trajectory, forecasting the public debt ratio to rise from 115.7 % in 2025 to approximately 124 % in 2028, up from a former projection of 122.7 %. Fitch stressed that a large share of public spending is politically difficult to reduce and that the already high tax burden leaves little room for further revenue increases.
Fitch highlighted the French government’s September estimate that the budget deficit would reach 6.4 % of GDP in 2027 without additional consolidation measures, versus a previous projection of 5.9 %. It also pointed to the draft 2027 budget, which targets a 5.0 % of GDP deficit and includes politically difficult measures, as evidence of the fiscal challenge ahead.
While the rating level remains unchanged, Fitch turned its outlook negative, signalling that future developments could deteriorate France’s credit profile. The agency warned that the interplay of slow growth, rising borrowing costs and a high debt level could further squeeze France’s fiscal space.
Key uncertainties highlighted by Fitch include the pace and depth of fiscal consolidation amid political fragmentation, the ability of the government to implement politically costly reforms, and the overall trajectory of France’s debt dynamics, which could be affected by changes in global interest rates and domestic economic conditions.