France retains its sovereign debt rating of A+, with a stable outlook. Fitch Ratings delivered its decision on Friday, August 28, staving off for now the threat of a downgrade, even as fiscal indicators continue to deteriorate.
The agency justified the decision by citing the “resilience” of the French economy — large, prosperous, with a solid banking sector and a diversified investor base — while acknowledging that “short-term growth will remain modest.” That assessment stands in stark contrast to the severity of its fiscal projections.
For while the rating itself is unchanged, the figures put forward by Fitch are markedly more pessimistic than at its last review in March. The agency now projects a public deficit of 5.2% of GDP in 2026, up from 4.9% previously, followed by 5.5% in 2027 and 5.2% in 2028. Public debt, meanwhile, would reach 122.7% of GDP by 2028, compared with 117.5% at the end of March according to Insee.
“These deficit projections are higher than at the last review, reflecting weaker growth, higher interest expenses, and additional defense commitments,” the agency explained, also pointing to “high and rising indebtedness, a political and social context that makes fiscal consolidation difficult, and weak growth potential.”
Political fragmentation remains, in Fitch’s view, “a major weakness for the rating,” because it “reduces the authorities’ capacity to implement durable fiscal adjustment and limits policy predictability.”
A reprieve that does not mask the tensions
Economy Minister Roland Lescure said the government “takes note” of the decision, asserting that “the government remains fully mobilized to contain the public deficit and debt, within a responsible and balanced framework, in order to guarantee over the long term financial stability as well as the competitiveness and growth of the French economy.”
The context, however, is tense. France narrowly avoided recession in the second quarter, the government lowered its 2026 growth forecast from 0.9% to 0.7%, and inflation accelerated in August to 2.4% year-on-year. More importantly, government borrowing rates now exceed 4% to refinance debt, a level unseen in nearly twenty years.
“Fitch, which was forecasting a public deficit of 4.9% of GDP in 2026, is now telling us the public deficit will be closer to 5.2% and will even reach 5.5% in 2027. That is a sharp deterioration,” notes Éric Dor, an economist at IÉSEG School of Management, who believes the agency had “grounds” to downgrade the rating.
The 2027 budget and the presidential election in the crosshairs
Just over a month before the presentation of the final budget bill of the five-year term, Prime Minister Sébastien Lecornu has still not set a deficit target for 2027. He will once again have to push through legislation without a parliamentary majority, facing repeated censure threats from the Socialist Party.
For economist Sylvain Bersinger, founder of the consultancy Bersingéco, this budget will not have a major long-term impact, unlike the 2027 presidential election. “The central question, when assessing debt, is the long-term projection. And the whole issue is what comes out of the presidential election,” he says.
Public debt has, in fact, entered the pre-presidential debate. Jean-Luc Mélenchon recently stated he wants to cancel part of France’s debt, drawing sharp reactions from candidates on the right and center.
Upcoming deadlines
The other two major rating agencies are set to rule in the coming months. Moody’s will publish its decision on October 23, followed by S&P Global Ratings on November 27.
AgencyCurrent RatingNext DeadlineOutlookFitch RatingsA+August 28, 2026 (decision rendered)StableMoody’sAa3October 23, 2026To be confirmedS&P Global RatingsA+November 27, 2026Stable
In autumn 2025, S&P downgraded France to A+, with a stable outlook. Moody’s, for its part, rates French debt Aa3, the bottom of the “high quality” category. Fitch’s decision to maintain the rating therefore leaves France in a weakened but not critical position, pending the verdicts of the other two agencies.