Fitch downgrades France's economic outlook from stable to negative

France's debt level is projected to increase from nearly 115.7% of GDP in 2025 to 124% by 2028, according to the Fitch ratings agency. The agency maintained France's credit rating at A+, but downgraded its outlook from stable to negative due to concerns over the country's debt burden. The US agency highlighted weaker growth, fiscal deterioration, and higher yields as factors that have made it more challenging to achieve sustained fiscal consolidation and reduce France's debt trajectory.

International investors have expressed significant concern over France's debt level, which has led to higher interest payments required to service the debt. France will hold a two-round presidential election in April-May of the following year, and the political divisions with far-right and far-left candidates leading in the polls are expected to make it difficult to agree on a credible fiscal strategy.

The emergence of policy debates ahead of the election has not significantly boosted Fitch's confidence in the prospects for durable deficit reduction and debt stabilization. Large protests over public services and living costs have also added to the social context, making fiscal consolidation more complex. The assessment follows data from the INSEE national statistics agency indicating that the French economy has not grown so far in 2025 and contracted between July and September.

Finance Minister Roland Lescure warned that failing to achieve the turnaround outlined in the budget would lead to a "wall."