Fitch Ratings Shifts France Credit Outlook to Negative

Fitch Ratings revised the credit outlook for France from stable to negative on October 30, citing deteriorating fiscal conditions and political fragmentation. The agency warned that a fractured political landscape, weaker economic growth, and a widening deficit are undermining the prospects for debt stabilization.

Fitch projects that France's debt-to-GDP ratio will rise to approximately 124% by 2028, an increase from 115.7% in 2025. This revision follows a period of economic instability characterized by a shrinking economy in the third quarter and 10-year yields exceeding 5.14%, the highest levels since 2002.

Economy Minister Roland Lescure attributed the economic shrinkage and inflation to a combination of internal and external shocks. While the outlook revision increases the risk of a future downgrade, Fitch noted that France's membership in the euro area and its strong institutions continue to anchor the current rating. This action follows a similar assessment by Moody's Ratings, which maintained France's Aa3 rating with a negative outlook based on the expectation that a deficit-reduction budget for 2027 will be adopted.