S&P Downgrades France's Sovereign Credit Rating to A+ Amid Political and Fiscal Uncertainty

On October 17, 2025, S&P Global Ratings downgraded France's sovereign credit rating from 'AA-' to 'A+', citing a high level of uncertainty regarding the country's public finances and political instability. This downgrade follows a similar move by Fitch and comes ahead of an anticipated decision by Moody's scheduled for October 24, 2025.

The rating agency pointed out that despite the French government's recent presentation of the 2026 budget, significant concerns remain over fiscal consolidation efforts. S&P forecasts that without further substantial measures, the pace of deficit reduction will be slower than needed. Public debt is projected to increase from 112% of GDP at the end of 2024 to 121% of GDP by 2028. The government aims to bring the budget deficit down to 5.4% of GDP in 2025 and further reduce it to 4.7% in 2026, with a longer-term goal of lowering the deficit to below 3% by 2029.

Political uncertainty was highlighted as a factor that could dampen growth by discouraging private investment and consumption. The recent survival of two motions of censure by Prime Minister Sébastien Lecornu has provided some temporary government stability, enabling the proposal of the 2026 budget to Parliament. However, challenges remain in passing the budget, as the government lacks a majority in the National Assembly and has made concessions to try to secure support.

French Minister of Economy and Finance, Roland Lescure, acknowledged S&P’s decision and reiterated the government's commitment to reaching the stated fiscal targets. He emphasized the need for collective responsibility among government members and parliamentarians to finalize the budget by the year's end.

While S&P downgraded France’s rating due to fiscal and political uncertainties, it revised the outlook from negative to stable, reflecting a balance between the country's increasing public debt and its structural strengths, including a diversified economy and sound financial market access. The agency warned that further downgrades could happen if fiscal conditions deteriorate or growth weakens more than expected, but improvements could also lead to a potential upgrade.