Fitch Revises France’s Outlook to Negative, Affirms A+ Rating
Fitch revised France’s credit outlook to negative from stable and affirmed its A+ rating. It cited weaker growth, a wider deficit, higher borrowing costs and political fragmentation.
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Fitch Ratings revised France’s credit outlook to negative from stable on Friday. It affirmed the country’s A+ rating, so this is a warning and not a downgrade.
A negative outlook means a cut is possible in the coming months. Reuters said the move raises the risk of a future downgrade for the euro zone’s second-largest economy.
Economy Minister Roland Lescure said he “takes note” of the decision. He said it confirms the need for a “responsible budget” by year-end, aimed at a 5% deficit, per Euronews.
Outlook Change, Not a Downgrade
Fitch cut France to A+ from AA- in September 2025, its lowest rating on record at the time, Reuters reported. Friday’s step leaves the rating unchanged at A+.
The outlook is the agency’s signal on where the rating may head. Its last scheduled review, on Aug. 28, kept the outlook stable, per Agence France Trésor.
| Agency | Rating | Outlook |
|---|---|---|
| Fitch (Oct. 30) | A+ | Negative, from stable |
| Moody’s | Aa3 | Negative |
| S&P Global (next review Nov. 27) | A+ | Stable |
| Morningstar DBRS | AA | Negative |
| Scope | A+ | Stable |
| KBRA (next review Dec. 11) | AA- | Stable |
Moody’s kept its rating days earlier, citing an expectation that a 2027 deficit-cutting budget will pass, per Reuters. Ratings come from Agence France Trésor and Challenges.
Why Fitch Turned Negative
Fitch pointed to weaker growth, higher borrowing costs and a wider deficit since August, Reuters reported. It also cited political fragmentation and a difficult social climate.
Fitch said the debate ahead of next year’s presidential election “has not materially strengthened” its confidence in lasting deficit cuts. It now sees debt rising to about 124% of GDP by 2028, from 115.7% in 2025.
The economy shrank 0.1% in the third quarter, Insee data showed on Friday. Inflation in October hit its highest since late 2023, Reuters said.
French 10-year yields passed 5.14% last week, the highest since 2002. They closed at 4.97% on Friday, AFP reported via Le Parisien.
The agency still backs the rating with France’s large, wealthy economy, strong institutions, euro membership and resilient banks.
The 2027 Budget Fight
The government’s draft 2027 budget targets a deficit of 5.0% of GDP. A summary of Fitch’s report by Investing.com says the agency expects 5.5%, as weak growth and concessions dilute savings.
Lescure said the country would head “into the wall” without a budget. The government lacks a majority in the National Assembly, so passage is uncertain.
Fitch still expects the budget to pass using constitutional tools, Euronews reported. Lescure has not ruled out Article 49.3, which forces a bill through without a vote.
Protests Add Pressure
More protests are planned this weekend, Reuters said. Our earlier reports cover how Macron appealed for calm after the worst unrest in years.
Earlier unrest included a cost-of-living revolt by students and teachers. Fitch cited the social climate as a risk to the budget.
What to Watch Next
S&P Global reviews France on Nov. 27 and currently rates it A+ with a stable outlook. Parliament must pass a 2027 budget by the end of the year.
Markets will watch whether yields stay near 5%. A fresh rating cut would deepen the pressure on Paris.
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