Fitch Ratings has cut France’s credit rating from AA- to A+, warning that persistent political instability and rising debt are undermining the country’s fiscal outlook. The downgrade adds pressure on President Emmanuel Macron and newly appointed Prime Minister Sébastien Lecornu, who faces the challenge of steering a fractured parliament toward fiscal reform.
The US agency cited the collapse of successive governments since the 2024 snap elections and the failure of outgoing PM François Bayrou’s austerity-driven budget as key reasons for the downgrade. Fitch forecasts France’s debt will climb from 113.2% of GDP in 2024 to 121% by 2027, with little chance of stabilisation this decade. The public deficit, currently 5.8% of GDP, is unlikely to fall below the EU’s 3% target before 2029.
Economists warn that the downgrade could raise borrowing costs for households and the state, though the immediate impact on interest rates is expected to be limited. Still, analysts stress the urgency of breaking France’s political deadlock to restore investor confidence.
Finance Minister Eric Lombard downplayed the decision, stressing France’s “economic solidity” and pointing to consultations already underway on a new budget. Experts, however, caution that fiscal consolidation remains difficult amid parliamentary fragmentation and public unrest.
Despite high debt, France retains economic strengths including low inflation, stable unemployment (7.5%), strong household savings, and a diversified economy. Fitch suggested domestic demand may help drive growth, with INSEE forecasting GDP expansion of 0.8% in 2025.
Among eurozone peers, Germany and the Netherlands remain top-rated, while Italy and Greece carry far lower credit scores. Rival agency S&P Global will issue its own assessment of France in November.
