S&P Downgrades France's Credit Rating to A+: Government Emphasizes Urgency of Fiscal Reforms

Standard & Poor's (S&P) has downgraded France's sovereign credit rating from AA- to A+ in October 2025, marking the second downgrade by S&P in 18 months and the third by major agencies within a year. This decision reflects ongoing high uncertainty over the country's public finances, slower-than-expected budget consolidation, and political instability despite recent governmental efforts. S&P warned that achieving France's budget deficit targets would require significant additional measures, projecting public debt to rise from 112% of GDP in 2024 to 121% by 2028.

In response, French Economy Minister Roland Lescure acknowledged the downgrade as a call for responsibility, lucidity, and seriousness. He reaffirmed the government's commitment to reducing the budget deficit to 5.4% of GDP by 2025 and further to 4.7% by 2026, with a long-term goal of bringing deficits below 3% by 2029 to stabilize public debt. Lescure emphasized the critical role of passing the upcoming budget, describing it as essential to convincing rating agencies and financial markets of France's fiscal credibility. He stressed the joint responsibility of the government and parliament to adopt a budget that reassures investors amid an already challenging economic environment.

The downgrade is significant as it could increase France's borrowing costs, with estimated interest payments reaching around 55 billion euros in 2025. Fitch had downgraded France's rating a month earlier, and Moody's rating decision is expected on October 24, 2025. Despite France's diverse economy and robust access to financial markets, S&P highlighted that high public spending and structural debt weigh heavily on sovereign creditworthiness. The agency revised France’s rating outlook to stable but warned of further downgrades if fiscal consolidation slows or economic growth weakens.

Overall, the downgrade underscores the urgency for France’s government to implement credible and effective fiscal reforms to restore investor confidence and stabilize public finances amid uncertain economic conditions.