The downgrade places France’s rating on par with that assigned to the public debt of Portugal, as well as Spain, China, and Japan.
The rating agency justified its decision by stating that “the uncertainty regarding France’s public finances remains high,” despite the recent presentation of the budget plan for 2026.
In response to this second downgrade of France’s rating within eighteen months by S&P, French Economy Minister Roland Lescure acknowledged the decision.
“The government reaffirms its commitment to maintain the budget deficit target of 5.4% of GDP for 2025,” the minister added in a statement to AFP.
According to S&P, if “this target of 5.4% of GDP by 2025 is achieved (…) without significant additional deficit reduction measures, the fiscal consolidation over the forecast horizon will be slower than expected.”
The agency predicts that “gross public debt will reach 121% of GDP by 2028, after 112% at the end of 2024,” continuing its report announcing the new rating.
“As a result, we lowered our unsolicited sovereign ratings for France from AA-/A-1+ to A+/A-1,” the agency detailed.
The new rating is complemented by a stable outlook.
“For 2026, the government presented a budget plan on Tuesday, October 14, aimed at accelerating the reduction of the public deficit to 4.7% of GDP, while preserving growth,” the Ministry of Economy responded.
“This is a key step that will allow us to meet France’s commitment to reduce the public deficit to below 3% of GDP by 2029,” the Ministry added.
“It is now the collective responsibility of the government and parliament to approve a budget aligned with this framework by the end of 2025,” the Ministry further stated.
This latest downgrade comes as Moody’s decision is anticipated on October 24 and follows a similar move by Fitch, which downgraded France’s rating to A+ a month ago, citing persistent instability and budgetary uncertainties.
Financial rating agencies, such as these, assess states’ credit quality—their ability to repay debts—on a scale ranging from AAA, the highest rating corresponding to the renowned triple-A, to D, which denotes default.
States fear downgrades from these agencies as they can lead to increased debt costs.
