Fitch Ratings’ Canary Wharf office in London, February 2023. Photo: Lewis Clarke / Geograph, CC BY-SA 2.0.
Fitch Ratings revised France’s credit outlook to negative from stable on Friday, citing weaker growth, higher borrowing costs and a wider budget deficit, while affirming the country’s A+ long-term sovereign ratings.
The October 30 action was an outlook revision, not a downgrade of France’s credit rating. Fitch said worsening debt dynamics and a fragmented political landscape had weakened its confidence that the government could deliver sustained deficit reduction.
The agency now expects French government debt to reach about 124% of gross domestic product in 2028, up from 115.7% in 2025. Its August forecast had put the 2028 ratio at 122.7%.
Fitch forecasts a budget deficit of 5.5% of GDP in 2027, above the government’s 5% target. It cited a weaker growth outlook and the risk that concessions during the budget process could reduce the planned savings.
The agency said France’s 10-year government bond yield had risen to 4.9% by the end of October from 4.1% at its August review. It expects interest payments to rise to 3.3% of GDP in 2028 from 2.5% in 2025, making it harder to bring the public finances under control.
France’s large, wealthy and diversified economy, strong institutions, euro-area membership and resilient banking sector continue to support its A+ rating, Fitch said. The agency’s growth forecasts stand at 0.5% for 2026 and 0.9% for 2027.
Fitch said a failure to materially improve the debt trajectory could lead to a downgrade. Faster fiscal consolidation could instead support a return to a stable outlook. It expects to review France’s rating again by the end of February 2027 at the latest.
JBizNews Desk | Paris
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