S&P Maintains France's Sovereign Credit Rating at A+ Amid Budgetary and Political Uncertainty

S&P Global Ratings has decided to keep France's sovereign credit rating at A+ with a stable outlook, following a downgrade from A+ to A on October 17, 2025. This move comes amid ongoing concerns over political instability and public finances, which prompted the initial downgrade. The French government, led by Economy Minister Roland Lescure, acknowledges the decision and is focused on reducing the public deficit from 5.4% of GDP in 2025 to 4.7% in 2026, aiming to bring it below 3% by 2029.

However, the approval of the 2026 budget remains uncertain, with the Senate currently examining the proposal without a clear path to compromise. The European Commission recognizes France's efforts to meet deficit reduction commitments but highlights significant uncertainty surrounding the budget plan. Economist Stéphanie Villers points to difficulties within the French parliament to agree on a solid budget, suggesting a unique challenge compared to other European countries.

Eric Dor from IESEG School of Management noted that since the October downgrade, there has been little new information to warrant a rating change. France’s credit rating now aligns with Spain and Portugal, which have experienced improved borrowing costs. The situation remains fragile, with political instability and budgetary debates continuing to shape the financial outlook.