S&P downgrades France’s credit rating over budget concerns

By Al Mayadeen English
Source: Agencies
18 Oct 2025 14:22

S&P cuts France’s credit rating to A+/A-1, citing high public debt and slow budget consolidation despite the new 2026 draft budget.

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This Sunday, Oct. 9, 2011, file photo shows 55 Water Street, home of Standard & Poor's rating agency, in New York (AP Photo/Henny Ray Abrams, File)

International credit rating agency Standard & Poor’s (S&P) has downgraded France’s credit rating to A+/A-1, citing growing uncertainty over the country’s public finances and slower-than-expected budget consolidation.

The downgrade, announced on Friday, comes just days after the French government submitted its 2026 budget draft to parliament. Despite the move, S&P expressed doubt over France’s ability to stabilize its fiscal trajectory.

France’s long- and short-term credit ratings were downgraded from AA-/A-1+ to A+/A-1, with S&P assigning a stable outlook going forward.

The agency emphasized that the public budget deficit remains a pressing issue, with this year’s shortfall projected to reach 5.4% of GDP.

Cut to France credit rating is 'wake up call'

France's Economic Minister Roland Lescure said on Saturday that the cut to Paris' credit rating by S&P Global is a "wake-up call" for the nation.

Speaking to Franceinfo radio, Lescure said, "This is an additional cloud to a weather report that is already quite grey" in terms of France's economic outlook.

Reports claim that this move by Lescure was a bid for him to gain support from lawmakers in order to help him survive two no-confidence votes.

This downgrade follows Fitch Rating's downgrade less than a week prior, as well as Moody's downgrade of France's score from Aa2 to Aa3 in December last year.

Debt-to-GDP ratio expected to rise to 121% by 2028

According to S&P, France’s gross government debt is forecast to climb to 121% of GDP by 2028. For comparison, the ratio stood at 112% of GDP at the end of 2024.

The rating agency noted that while some measures have been taken, the overall pace of budget consolidation has been slower than expected, raising concerns about the sustainability of France’s fiscal position in the medium term.

2026 draft budget fails to ease fiscal concerns

The 2026 budget proposal, submitted this week, has not alleviated investor concerns. S&P pointed to continued uncertainty around fiscal discipline and warned that persistent deficits could weigh on long-term economic stability.

The downgrade places further pressure on French officials to implement credible reforms aimed at reducing public debt while maintaining economic resilience in the face of slowing growth across the eurozone.