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Economy

Fitch Cuts France’s Outlook to Negative as Debt Is Seen Rising to 124% of GDP by 2028

Fitch kept France's A+ rating but moved its outlook to negative, citing weaker growth, higher borrowing costs and a wider deficit since August, with debt projected to reach about 124% of GDP by 2028.

By admin Oct. 31, 2026 · 10:45 PM ET 1 min read

A wide Paris boulevard lined with stone apartment buildings and trees on an overcast day.
A wide Paris boulevard lined with stone apartment buildings and trees on an overcast day.

Fitch Ratings revised France’s credit outlook to negative from stable on Friday, while affirming the country’s A+ rating. The agency said deteriorating fiscal conditions and political fragmentation are making it harder for France to stabilize its debt.

Modern glass office buildings around an empty paved plaza under a cloudy sky.
Modern glass office buildings around an empty paved plaza under a cloudy sky.

Fitch pointed to weaker growth, higher borrowing costs and a wider deficit since its August review. National statistics office Insee reported gross domestic product fell 0.1% in the third quarter, after stagnation in the second quarter and a 0.2% decline in the first. French 10-year bond yields rose above 5.14% last week, their highest since 2002, according to Reuters.

Debt path and the budget fight

Fitch now expects general government debt to rise to about 124% of GDP by 2028, from 115.7% in 2025. The agency estimates a cumulative fiscal adjustment of 3.5% of GDP is needed to stabilize debt, according to Investing.com. It projects a 2027 deficit of 5.5%, above the government’s 5% target in its draft budget. Fitch said the rating remains supported by the size and diversification of the economy, strong institutions, euro-area membership and a resilient banking sector.

Economy and Finance Minister Roland Lescure said he takes note of the decision and said the government needs a 2027 budget adopted by the end of the year that brings the deficit to 5% of GDP or less. Fitch said it expects the budget to be adopted despite the government lacking a majority in the National Assembly. Moody’s kept France at Aa3 with a negative outlook days earlier, Reuters reported.

Reporting based on coverage by Reuters and The Private Banker.

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