Fitch Ratings moved France’s outlook to negative while affirming its A+ rating, with the agency’s 2027 deficit forecast above the government’s target and debt costs rising.
The government’s draft budget sets a 5% public-deficit goal for 2027; Fitch projects 5.5%, citing weaker growth and the risk of concessions during negotiations. The rating action came Oct. 30, when Fitch affirmed France’s long-term issuer default rating at A+ and changed the outlook from stable to negative.
Fitch expects public debt to increase from 115.7% of GDP in 2025 to about 124% in 2028. It also projects interest payments will rise from 2.5% of GDP in 2025 to 3.3% in 2028. The agency lowered its growth forecasts to 0.5% for 2026 and 0.9% for 2027, from 0.8% and 1.1%, respectively.
France’s GDP fell 0.1% quarter over quarter in the third quarter of 2026 after no change in the second quarter, according to the first estimate from the National Institute of Statistics and Economic Studies (Insee), published Oct. 30. Exports declined 1.7% in the quarter, while imports rose 0.1%.
The government filed its proposed budget with the National Assembly on Oct. 1. It includes €43 billion in measures across the finance and social-security bills, as part of a €54 billion consolidation effort. The proposal emphasizes spending controls, avoids general increases in major taxes and would cut the surtax on large companies by 30%. The measures still require parliamentary consideration. The proposal is detailed in the draft 2027 budget.
Fitch pointed to political resistance to reducing public spending and limited room for further tax increases, given France’s high tax burden. Economy and Finance Minister Roland Lescure said the budget should pass by year-end to restore public finances and reach the 5% deficit goal. Fitch considers passage of the current proposal likely, but said the 2027 election cycle leaves the durability of later deficit-reduction efforts uncertain.
Fitch expects to review France’s rating by the end of February 2027 at the latest.
