Fitch puts negative outlook on France’s rating

Credit ratings agency Fitch revised France’s outlook to “negative” from “stable” on Friday, citing increases in fiscal policy and political risks.

“This year’s projected fiscal slippage places France in a worse fiscal starting position, and we now expect wider fiscal deficits, leading to a steep rise in government debt towards 118.5% of GDP by 2028,” Fitch said in a statement, while maintaining France’s rating at “AA-.”

France’s public finances have sharply deteriorated this year as tax income fell short of expectations and spending exceeded them, leaving French debt at risk of a ratings downgrade.

The government presented a 2025 budget on Thursday that aims to reduce the hole in the public finances by 60 billion euros ($65.5 billion) through spending cuts and tax hikes focused on the wealthy and big companies.

“The 2025 budget that we just presented reflects the government’s determination to put the public finances on a better path and get debt under control,” Finance Minister Antoine Armand said in a statement.

Fitch said that high political fragmentation and a minority government complicate France’s ability to deliver on getting its public finances on a sounder footing.