Fitch affirms France rating but turns outlook negative

Fitch Ratings affirmed France’s A long-term issuer default rating on October 30 but changed its outlook from stable to negative, citing weaker growth, rising borrowing costs and uncertainty over sustained deficit reduction. The agency’s decision leaves the rating unchanged while signaling concern about the country’s fiscal trajectory. Fitch said political divisions and the difficulty of maintaining consolidation efforts after the 2027 presidential election could complicate efforts to stabilize public debt. It also cited a weaker economic outlook and higher financing costs since its previous assessment in August. Fitch forecasts public debt will rise from 115.7% of GDP in 2025 to about 124% in 2028. It projects interest payments will increase from 2.5% of GDP in 2025 to 3.3% in 2028. The agency lowered its growth forecasts to 0.5% for 2026 and 0.9% for 2027, from previous projections of 0.8% and 1.1%, respectively. France’s draft 2027 budget sets a public deficit target of 5% of GDP. Fitch forecasts a deficit of 5.5% that year, attributing the gap to weaker growth and the possibility of concessions during negotiations. The government filed the draft with the National Assembly...