PARIS, Oct. 31 (Xinhua) -- Fitch Ratings said Friday that it has revised France's long-term issuer default ratings (IDRs) outlook to negative from stable while affirming the country's rating at "A+".
The negative outlook reflects weaker economic growth, higher borrowing costs and a wider budget deficit since its August 2026 review, which together have worsened France's debt dynamics from an already weak starting point, it said.
Persistent political fragmentation and a challenging social environment have made it more difficult for France to achieve sustained fiscal consolidation, noted the report, adding that however, the country's rating remains supported by its large, wealthy and diversified economy, strong institutions, membership in the euro area and resilient banking sector.
Fitch forecasts France's public debt-to-GDP ratio to rise from 115.7 percent in 2025 to around 124 percent in 2028, up from its previous forecast of 122.7 percent. It noted that a large share of public spending is politically difficult to reduce, while the already high tax burden leaves little room for further revenue increases.
The agency also noted that the French government projected in late September that the budget deficit would reach 6.4 percent of GDP in 2027 without additional consolidation measures, up from its previous projection of 5.9 percent. The draft 2027 budget targets a deficit of 5.0 percent of GDP and includes politically difficult measures.
Fitch lowered its forecasts for France's real GDP growth to 0.5 percent in 2026 and 0.9 percent in 2027, from previous estimates of 0.8 percent and 1.1 percent, respectively, citing weaker economic data in the first half of 2026.
France's GDP contracted 0.1 percent in the third quarter of 2026, according to preliminary data released Friday by the French National Institute of Statistics and Economic Studies. Fitch said the figure in the third quarter further highlights downside risks to its growth forecast. ■