Fitch keeps France at A+ but cuts its outlook to negative, citing weaker growth, higher borrowing costs and a wider deficit

Fitch Ratings on Friday kept France’s long-term credit rating at A+ but lowered its outlook from stable to negative^5,7.

The agency said the negative outlook reflects a deterioration since its August review, and it cited weaker growth, higher borrowing costs and a wider deficit as the reasons¹.

Fitch projected that France’s debt-to-GDP ratio would reach 124% in 2028⁴. It also set out a forecast for the debt level of the European Union’s second-largest economy^5,7.

France remains at A+². Last week, Moody’s Ratings kept its Aa3 credit rating on France unchanged^3,6.

Why it matters to investors

A negative outlook is a formal warning that a rating downgrade could follow⁴. For a sovereign borrower, the outlook is the step that precedes a change in the rating itself, and it signals that the agency sees risks building rather than receding^1,4.

The three factors Fitch named feed on each other: slower growth weakens tax receipts, higher borrowing costs raise the interest bill, and a wider deficit adds to the stock of debt¹. Interest payments are already one of the French government’s largest line items and will likely exceed its military spending, one commentator argued⁹.

The question of who would support France in a debt crisis has also been raised. The main firewall would remain the European Central Bank, while an intervention by the International Monetary Fund appears almost certainly ruled out, according to one analysis⁸.

The decision was framed as a budget warning to Paris². It leaves France with a split picture across the agencies: an A+ rating on negative outlook at Fitch, and an unchanged Aa3 rating at Moody’s^5,6.

What to watch

The next marker is whether Fitch follows the negative outlook with an actual downgrade, which the outlook change explicitly leaves open⁴.

A second is the path of the deficit and of borrowing costs, the two variables Fitch singled out alongside growth¹. Its projection of a 124% debt ratio in 2028 gives a benchmark against which later budget figures can be measured⁴.

A third is whether other agencies move. Moody’s has so far kept its rating on France unchanged, so any revision there would widen the warning beyond a single agency^3,6.