France’s credit rating has been downgraded to A+, the lowest on record from a major rating agency, amid warnings that the country’s debt will continue rising until at least 2027 without urgent reforms. The move comes during heightened political turmoil following the resignation of Prime Minister Francois Bayrou, who failed to push through an austerity budget.
The downgrade adds pressure on newly appointed Prime Minister Sebastien Lecornu and President Emmanuel Macron, as they attempt to restore fiscal stability while facing a fragmented parliament and rising borrowing costs. Fitch highlighted the lack of a “clear horizon for debt stabilisation” and warned that political divisions weaken the government’s ability to deliver meaningful fiscal consolidation.
France’s debt currently stands at 113% of GDP and is projected to rise to 121% by 2027, well above eurozone limits. The country’s budget deficit was 5.8% of GDP last year, compared with the eurozone ceiling of 3%. Rising yields on French bonds now mirror those of Italy, raising concerns over higher debt-servicing costs.
The downgrade could also influence other rating agencies and investors, potentially leading to increased pressure on France’s finances. Despite the setback, the government still forecasts modest economic growth of 0.8% for 2025, slightly above earlier expectations.