PARIS, Oct. 24 (Xinhua) -- International credit rating agency Moody's on Friday affirmed France's sovereign credit rating at Aa3 with a negative outlook.
Moody's said the Aa3 rating assumes France will adopt a 2027 budget aimed at reducing its fiscal deficit, with borrowing costs and social tensions easing somewhat in the coming months.
The decision came as markets had widely anticipated a downgrade that would have brought France's rating in line with the A+ ratings assigned by Fitch and S&P.
French Prime Minister Sebastien Lecornu welcomed the decision, saying the government aims to pass the 2027 budget by the end of this year and reduce the fiscal deficit to 5 percent of GDP.
France has faced mounting fiscal pressure in recent years. The government expects its fiscal deficit to reach 5.4 percent of GDP in 2026. Meanwhile, its public debt has also continued to rise. According to the national statistics institute INSEE, public debt stood at 119 percent of GDP at the end of the second quarter of 2026.
Moody's warned that substantial and sustained fiscal efforts would still be needed after the 2027 presidential election to improve public finances and stabilize debt.
Recently, large-scale protests over education, rising living costs and deteriorating public services erupted across the country.
With the 2027 presidential election approaching, political divisions and social tensions are posing further challenges to the government's efforts to bring public finances under control. ■