Fitch Ratings has affirmed France's long-term credit rating at A+ with a stable outlook, choosing not to downgrade the European Union's second-largest economy despite mounting fiscal pressures from high debt and persistent budget deficits.
The decision, announced on Friday, comes at a critical juncture for Paris as government officials grapple with weakening economic growth and intense political uncertainty while preparing the 2027 national budget.
In a statement explaining its decision, Fitch Ratings cited France's large and diversified economy, robust banking sector, and broad investor base as key credit strengths. However, the agency warned that the country continues to face high and rising debt levels, weak economic growth potential, and a challenging political and social climate that makes fiscal consolidation difficult to implement.
Fitch Ratings, one of the primary global credit rating agencies, had previously downgraded France to A+ in September 2025, pointing to deteriorating public finances and a difficult political landscape. The agency subsequently maintained both the rating and the stable outlook in its previous review in March.
Rising Deficit and Public Debt Forecasts
Despite avoiding a fresh rating cut, Fitch delivered a more pessimistic outlook regarding the future trajectory of French public finances. The agency projects the budget deficit to reach 5.2 percent of gross domestic product in 2026, rising further to 5.5 percent in 2027 before easing slightly to 5.2 percent in 2028.
The new forecasts signal a worsening trend after France managed to reduce its budget deficit from 5.8 percent of GDP in 2024 to 5.1 percent in 2025. The projected deficit figures indicate that fiscal pressures will remain elevated throughout the forecast period.
Fitch painted an even more concerning picture for public debt, forecasting that French government debt will continue its upward trajectory. The agency estimates that national debt will grow from 115.7 percent of GDP in 2025 to reach 122.7 percent of GDP by 2028.
In its comprehensive evaluation, Fitch recognized France's high per capita income, resilient financial system, and deep capital markets as major structural advantages. On the other hand, the agency emphasized that rising debt loads, political and social resistance to fiscal consolidation measures, and limited long-term growth prospects continue to weigh heavily on France's creditworthiness.
Economic Stagnation and Budgetary Challenges
The credit rating announcement coincided with final economic figures released on Friday by Insee, France's national statistics agency. The data confirmed that the French economy recorded zero growth in the second quarter of 2026, remaining completely stagnant after an initial estimate had indicated a modest expansion of 0.2 percent. The zero-growth performance followed a 0.2 percent contraction in the first quarter of the year.
The stagnant economic activity creates significant headwinds for the government's economic agenda. The flat GDP growth makes it increasingly difficult for Paris to achieve its full-year economic growth target of 0.7 percent. Furthermore, sluggish economic performance heightens the risk that the government will fail to meet its target of capping the budget deficit at 5 percent of GDP.
These mounting economic difficulties leave the government of Prime Minister Sébastien Lecornu facing a complex fiscal equation as it prepares to present the 2027 budget. The political environment is further heightened by uncertainty surrounding the upcoming French presidential election scheduled for next spring.
Commenting on the decision by Fitch Ratings, Minister of Economy and Finance Roland Lescure stated that the government remains fully committed to its efforts to curb the deficit and reduce public debt. Lescure added that the administration's primary objective is to safeguard financial stability while preserving the overall competitiveness of the French economy.
