S&P Global Ratings has cut France’s long-term sovereign credit rating from AA- to A+, citing mounting public debt, sluggish fiscal reforms, and deepening political divisions.
The downgrade, announced Friday, comes with a “stable” outlook but reflects concerns about France’s ability to rein in spending and stabilize its finances in the coming years.
The agency now expects France’s debt-to-GDP ratio to rise to 121% by 2028, up from 112% at the end of 2024. It warned that ongoing political turbulence—highlighted by Prime Minister Sébastien Lecornu’s narrow survival of two no-confidence votes and the suspension of the controversial pension reform—underscores the government’s fragile position ahead of the 2027 presidential election.
S&P forecasts modest economic growth of 0.7% in 2025, with only limited improvement expected in 2026. It cautioned that higher borrowing costs could spill over into the wider economy, slowing recovery efforts.
Finance Minister Roland Lescure called for unity to ensure a new budget is passed by year’s end, stressing the need to bring the deficit closer to the EU’s **3% of GDP target**. S&P, however, predicts a 2025 deficit of **5.4%**, warning that fiscal consolidation will lag without additional spending cuts or revenue measures.
This marks the second warning from S&P this year, following its earlier move to downgrade France’s outlook from “stable” to “negative.” Rival agency **Fitch** also cut France’s rating to A+ last month, citing similar fiscal strains. The downgrade could raise France’s borrowing costs and potentially prompt institutional investors to reduce holdings of French sovereign bonds.
