This downgrade puts France’s rating on a par with that of Portugal, Spain, China, and Japan.
The rating agency’s decision was explained by the consideration that “uncertainty over French public finances remains high,” and this “despite the presentation this week of the 2026 budget proposal.”
Reacting to S&P’s second downgrade of France’s rating in a year and a half, French Economy Minister Roland Lescure said he had “taken note” of the decision.
“The government confirms its determination to maintain the (budget) deficit target of 5.4% of GDP for 2025,” the minister added in a statement broadcast to AFP.
According to S&P, if “this target of 5.4% of GDP in 2025 is achieved (…) without significant additional measures to reduce the fiscal deficit, fiscal recovery over the forecast horizon will be slower than anticipated.”
The agency forecasts that “gross public debt will reach 121% of GDP in 2028, after 112% at the end of 2024,” it continued in the statement announcing the new rating.
“As a result, we have downgraded our unsolicited sovereign ratings on France from AA-/A-1+ to A+/A-1,” it detailed.
The new rating is complemented by a stable outlook.
This new rating downgrade comes as Moody’s is expected to make a decision on October 24th and follows a similar decision by Fitch, which lowered France’s rating to A+ a month ago, citing persistent instability and budgetary uncertainty.
Financial rating agencies, such as these, rate the creditworthiness of states—that is, their ability to repay their debts—on a scale ranging from AAA, the highest rating, corresponding to the famous triple A, to D, which corresponds to default.
Downgrades in the ratings assigned by these agencies are feared by States, as they may lead to an increase in the cost of their debts.