Fitch downgrades France’s credit rating amid political crisis

2 comments

1. France’s credit rating was cut by Fitch from **AA- to A+** because of political troubles and growing debt. The agency says France’s debt could climb from **113% of GDP in 2024 to 121% in 2027**, and the budget deficit won’t likely fall below 3% until at least 2029.

   The downgrade comes after former Prime Minister François Bayrou lost his job when his strict budget plan was rejected. The new Prime Minister, Sébastien Lecornu, must now try to calm investors and push through a budget, even as politics remain stuck before the 2027 elections.

   France is the third most indebted country in the eurozone after Greece and Italy, but it still has some positives: low inflation, stable unemployment at 7.5%, strong household savings, and modest growth expected in 2025 (0.8%). Still, experts warn that without a clear plan to cut debt, things could get much worse.

   It is my opinion that leaders like Macron ignore important domestic issues and might drag the country down. Any thoughts?

2. Honestly the downgrade feels less about the actual numbers and more about the mess in politics right now. Markets already knew France debt was heavy but when you add parliament fights and people out in the street it just looks unstable. Fitch is just saying out loud what investors already whisper.

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