In brief
Fitch Ratings shifted France's long‑term issuer default rating outlook from stable to negative while keeping the A+ rating, citing slower growth, rising borrowing costs and a larger budget deficit. Updated forecasts predict GDP growth of 0.5 % in 2026 and 0.9 % in 2027, and a debt‑to‑GDP ratio reaching about 124 % by 2028.
Paris, France – Fitch Ratings on Friday lowered France’s long‑term issuer default rating outlook from stable to negative, while affirming the country’s rating at A+.
The shift reflects a combination of weaker economic growth, higher borrowing costs and a widening budget deficit since the agency’s August 2026 review, the report said.
In its assessment, Fitch noted that persistent political fragmentation and a challenging social environment have made it harder for France to achieve sustained fiscal consolidation, adding that the nation’s large, wealthy and diversified economy, strong institutions, membership in the euro zone and resilient banking sector still support the rating level.
The rating agency forecasts France’s public debt‑to‑GDP ratio to rise from 115.7 percent in 2025 to around 124 percent in 2028, a modest increase from its previous projection of 122.7 percent.
Earlier this year, the French government projected that the budget deficit would reach 6.4 percent of GDP in 2027 without additional consolidation measures, up from its previous projection of 5.9 percent. The draft 2027 budget still targets a deficit of 5.0 percent of GDP but includes measures that are politically difficult to implement.
Fitch also lowered its forecasts for France’s real GDP growth to 0.5 percent in 2026 and 0.9 percent in 2027, from previous estimates of 0.8 percent and 1.1 percent, respectively. The downgrade was partly based on weaker economic data in the first half of 2026.
Preliminary data released on Friday by the French National Institute of Statistics and Economic Studies showed that France’s GDP contracted 0.1 percent in the third quarter of 2026, a figure that the rating agency said further highlighted downside risks to its growth forecast.
While the agency maintains the A+ rating, the negative outlook signals a more cautious stance on France’s long‑term borrowing conditions and indicates that the country’s debt dynamics may deteriorate as fiscal deficits widen and borrowing costs rise.
For investors, the change may spur a reassessment of French sovereign debt holdings as markets adjust expectations of future fiscal stress and economic performance.
France’s officials have not yet issued a statement responding to the new outlook, but analysts expect the decision to prompt further scrutiny of the country’s debt trajectory and fiscal strategy in the coming months.