Overview
- Fitch opens the autumn round of reviews with France at AA- on a negative outlook, and a cut to the A category would raise the sovereign’s risk premium and borrowing costs.
- The rapid appointment of Sébastien Lecornu as prime minister revives hopes of an on-time 2026 budget, leading some analysts to judge a wait for greater political visibility plausible.
- Markets have largely priced deterioration, with French 10‑year yields trading well above Germany’s and briefly topping Italy’s, implying a lower implicit rating than AA-.
- Persistent concerns center on weak public finances, including a 2024 deficit near 5.8% of GDP and debt around 113% of GDP, which challenge the credibility of consolidation plans.
- Fitch rarely initiates downgrade cycles, and several economists expect S&P to act at its 28 November review; INSEE now projects 0.8% growth this year as analysts warn that sustained high rates could squeeze budgets.