Fitch, USA News (Paris): The rating agency Fitch has maintained France’s sovereign debt rating at A+, but lowered its outlook from stable to negative. The decision follows lower economic growth, higher borrowing costs, and a larger deficit compared to the agency’s previous evaluation in August.
This rating action followed figures released by Insee indicating that French gross domestic product fell by 0.1% in the third quarter, following stagnation in the second quarter and a 0.2% decline in the first. Fitch pointed to ongoing political fragmentation and a difficult social climate marked by mass protests, which complicate the implementation of durable fiscal consolidation.
France’s rating continues to be supported by the size, wealth, and diversification of its economy, strong institutions, eurozone membership, and the resilience of its banking sector.
Government Response and Budget Discussions
Economy and Finance Minister Roland Lescure stated that the government takes note of the decision by the American rating agency. He emphasized the absolute necessity of adopting a responsible budget by the end of the year to restore public accounts and reduce the deficit to 5%.
Earlier in the day, Mr. Lescure described the French economy as coming to a standstill and warned that the country faces severe difficulties without a recovery budget. Adopting the text through Parliament remains uncertain due to the lack of a majority in the National Assembly and the approaching presidential election.
Fitch analysts noted that political debates six months ahead of the vote have not significantly strengthened confidence in achieving a sustainable deficit reduction. If parliamentary gridlock occurs, the government has indicated it might consider constitutional mechanisms such as Article 49.3 or ordinances, though experts debate the long-term credibility effects of such measures on financial markets.
