Fitch Downgrades France Credit Rating to A+ Amid Rising Debt

Fitch Ratings has downgraded France's sovereign credit rating from AA- to A+, marking the lowest rating the country has received from a major agency. This downgrade reflects growing concerns about France's escalating public debt, which has reached over 113% of GDP, and its budget deficit exceeding eurozone limits at around 5.8%. The political instability following the collapse of Prime Minister François Bayrou's government and the challenge faced by newly appointed Prime Minister Sébastien Lecornu to form a cabinet and pass a credible 2026 budget has exacerbated investor worries about fiscal consolidation. Fitch highlighted the lack of a clear plan to stabilize debt as a key factor behind the downgrade, which places France on par with Belgium and below the UK in creditworthiness. Although markets had largely anticipated the downgrade, rising bond yields are increasing France's borrowing costs, adding pressure at a critical economic juncture. Economists and officials acknowledge the downgrade as a logical response to political and fiscal uncertainty, though some argue the market impact is already priced in.