Rating agency S&P Global Ratings downgraded France's sovereign rating from AA- to A+ on Friday, October 17, citing high uncertainty over public finances despite the 2026 budget proposal. The move, expected but earlier than scheduled, primarily punishes ongoing political instability. The government reaffirms its commitment to deficit reduction.
S&P Global Ratings announced on October 17, 2025, the downgrade of France's sovereign rating from AA- to A+, with a stable outlook. This is the second such action by S&P in a year and a half, despite the presentation on October 14 of the 2026 budget proposal by Prime Minister Sébastien Lecornu's government, aiming for a 4.7% GDP deficit in 2026 and below 3% by 2029.
S&P attributes the move to 'high uncertainty over French public finances,' even though the 5.4% GDP target for 2025 is expected to be met. The agency forecasts a slower consolidation pace without additional measures, with public debt rising from 112% of GDP at the end of 2024 to 121% in 2028. It highlights political instability as the 'most severe since the founding of the Fifth Republic in 1958.' Since May 2022, President Emmanuel Macron has dealt with two parliaments without a majority, increasing fragmentation, and six prime ministers in three years, worsened by recent no-confidence motions and the suspension of pension reforms.
Economy Minister Roland Lescure 'takes note' of the decision: 'The government confirms its determination to meet the 5.4% GDP deficit target for 2025.' He emphasizes that the budget proposal is a 'key step' to fulfill European commitments. The A+ rating now aligns France with Spain, Japan, Portugal, and China. Debt interest payments are estimated at around 55 billion euros in 2025, amid higher French rates compared to Germany's since the Assembly's dissolution in June 2024.
The decision, ahead of the initial schedule (set for November 28), comes before Moody's review expected on October 24, a month after Fitch's similar downgrade to A+.