France credit rating downgraded to A+ by S&P Global

S&P Global has downgraded France’s long‑term credit rating from AA‑ to A+, citing concerns over rising debt and political tensions. In its latest sovereign review, the agency flagged governance challenges and ballooning liabilities, warning that these factors threaten the government’s ability to reduce the budget deficit. France’s government debt is projected to reach 121 % of GDP in 2028, up from 112 % at the end of last year.

The country has struggled to rein in spending while contending with political turbulence. Prime Minister Sébastien Lecornu recently survived two no‑confidence votes in parliament after suspending a contested pension‑reform package. S&P revised France’s outlook to “stable,” but noted that uncertainty surrounding public finances remains high, especially ahead of the 2027 presidential election. The agency pointed to the suspension of the 2023 pension reform law as a sign of political fragility.

Economic growth is projected at 0.7 % in 2025, with only a muted recovery expected in 2026. In reaction to the downgrade, Finance Minister Roland Lescure emphasized the need for the government and parliament to pass a budget by year‑end, ensuring the deficit moves toward the EU ceiling of 3 % of GDP. S&P noted that France is likely to meet its 2025 deficit target of 5.4 % of GDP, but warned that significant additional measures are required to accelerate consolidation.

This downgrade follows earlier signals of trouble for France’s creditworthiness. Earlier this year, S&P lowered the country’s outlook from “stable” to “negative” due to weak public finances, and last month Fitch also cut France’s rating from AA‑ to A+, citing similar concerns about debt and the lack of a credible fiscal roadmap. The downgrade could raise borrowing costs and trigger forced bond sales by institutional investors limited to high‑grade sovereign debt.

S&P Global’s decision underscores the need for France to address its fiscal challenges and implement substantial reforms to restore creditworthiness. With the 2027 presidential election approaching, investors and rating agencies will closely watch the country’s ability to manage its debt and enact effective economic policies.