Fitch maintains France's sovereign debt rating at A+ despite rising debt and lower growth

Sovereign rating confirmed at A+

Fitch Ratings affirmed France's sovereign debt rating at A+ with a stable outlook on 28 August 2026, keeping the country's credit evaluation unchanged. The agency classified French debt in the upper-medium quality category, a level first assigned in September 2025 when Fitch reduced France's rating by one notch. Under Fitch's methodology, a stable outlook reflects no expectation of an adjustment over the short or medium term. The credit agency pointed to France's large, diversified economy, resilient banking sector, and broad investor base as key strengths supporting the sovereign profile. At the same time, Fitch identified high and rising public debt, weak growth potential, and a difficult political climate as ongoing constraints on budgetary consolidation.

Macroeconomic headwinds and fiscal revisions

The decision follows months of deteriorating economic conditions across France after Fitch's previous assessment in March 2026. In that March review, the agency projected a 2026 public deficit of 4.9% of gross domestic product, aligning closely with the executive's 5.0% target. Conditions subsequently worsened due to the conflict in Iran and elevated crude oil prices, which curbed economic activity and depressed state tax receipts. France narrowly avoided recession in the second quarter of 2026, while year-on-year inflation reached 2.4% in August. Additionally, state borrowing yields reached their highest point in nearly twenty years, increasing debt service expenditures.

In response to the economic slowdown, the French government reduced its 2026 GDP growth forecast twice, revising the projection from 1.0% to 0.9% in April, and down to 0.7% in July. Minister of Economy Roland Lescure acknowledged publicly that the 5.0% deficit target would be difficult to attain under these conditions. Sylvain Bersinger, founder of the consultancy Bersingéco, described the external factors dragging on output.

The latest news has been bad, with the war in Iran, the rise in oil prices, which have weakened growth.

Government reaction and debt trajectory

France's national debt has expanded beyond €3,500 billion, equivalent to 117% of gross domestic product. Following the announcement from Fitch, Roland Lescure, the Minister of the Economy, Finances, and Industrial, Energy, and Digital Sovereignty, issued a formal response taking note of the assessment. Lescure stated that the government remains mobilized to control both the deficit and the debt trajectory within a balanced framework, aiming to protect long-term financial stability and economic competitiveness. Economists had anticipated possible rating pressure, with Éric Dor, director of economic studies at the IESEG School of Management, noting that the agency possessed substantive arguments for a downgrade.

Budget negotiations and political hurdles

The affirmation arrives roughly five weeks before the French parliament opens debate on the 2027 state budget. Prime Minister Sébastien Lecornu faces the task of passing the finance bill without a working majority in the National Assembly, repeating the legislative difficulties encountered during previous budget cycles. Lecornu has not yet published an official deficit target for 2027. Economists note that while annual budget debates create immediate political friction, rating agencies place greater weight on long-term debt sustainability and policy continuity heading into the 2027 presidential election.