The rating agency Fitch affirmed France’s sovereign debt rating at AA- with a stable perspective on Friday, August 28, 2026, helping the government avoid an immediate downgrade despite mounting public debt and widening fiscal deficits.
Fitch Projects Wider Deficits and Rising Debt Load
Fitch adopted a more pessimistic fiscal outlook than the French government, projecting public deficits of 5.2% of GDP in 2026, 5.5% in 2027, and 5.2% in 2028, Le Monde reports. These figures surpass the agency’s previous March estimate of a 4.9% deficit for 2026. The rating agency attributes the widening gap to weaker economic growth, higher interest expenses on state borrowing, and increased defense commitments. Furthermore, Fitch warns that public debt will climb from 115.7% of GDP in 2025 to 122.7% by 2028, up from the first-quarter 2026 INSEE figure of 117.5% (or 3,536.1 billion euros) reported by BFM Business.
Political Fragmentation and Stagnant Economic Growth
Political paralysis remains a primary vulnerability for France’s creditworthiness. This political gridlock coincides with sluggish macroeconomic indicators. Following a 0.2% economic contraction in the first quarter of 2026 and a stagnant second quarter, the government lowered its full-year growth forecast to 0.7%, down from 1% earlier in the year.
Government Response and Upcoming Agency Decisions
Economy Minister Roland Lescure acknowledged that the administration’s initial 5% deficit target for the year would be difficult to reach, noting in a Le Monde statement that the government remains fully committed to containing public debt through a responsible framework to safeguard financial stability and competitiveness. The stability of French sovereign debt will face two additional tests in the coming months. BFM Business confirms that Moody’s is scheduled to issue its rating review on October 23, followed by S&P Global Ratings on November 27, just as the National Assembly debates the 2027 budget.
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