Fitch Affirms France at A+ With Stable Outlook as Debt Set to Reach 122.7 Percent of GDP by 2028
Fitch Ratings affirmed France’s long term sovereign credit rating at A+ with a Stable Outlook on 28 August 2026, even as it forecast French government debt climbing to 122.7 percent of gross domestic product by 2028, up from 115.7 percent in 2025 and, in the agency’s own words, more than double the median for countries in the same rating category. The action, published at 5 p.m. Eastern Time, or 9 p.m. Greenwich Mean Time on our calculation, holds France’s rating exactly where it stood before, but the supporting analysis lays out in detail why upward rating pressure remains limited.
Holding the Line at A+
Alongside the Long Term Issuer Default Rating, the agency also affirmed France’s Short Term Issuer Default Rating at F1+, its local currency Long Term and Short Term Issuer Default Ratings at A+ and F1+, and its Country Ceiling at AAA, four notches above the sovereign rating itself. The agency said the Country Ceiling reflects France’s membership of the eurozone currency union and the associated reserve currency status of the euro, judging the risk of capital or exchange controls within the currency union as exceptionally low but not negligible.
France’s rating committee, chaired by Jan Friederich with Malgorzata Wegner as primary analyst, said the rating is supported by a large, diversified, high income economy, a sound banking sector and a diverse investor base, and weighed down by high and rising debt, a political and social backdrop that makes fiscal consolidation difficult, and low potential growth. Under the agency’s own scoring model, France’s data alone would already produce an A+ rating; the committee then applied a one notch upward adjustment for macroeconomic stability, judging that the volatility the pandemic briefly added to France’s growth data does not reflect a lasting risk, and a one notch downward adjustment for public finances, citing the very high and rising level of government debt and the difficult political environment for reducing it.
Deficits Keep the Debt Climbing
France’s fiscal deficit narrowed from 5.8 percent of GDP in 2024 to 5.1 percent in 2025, a smaller deficit than the agency had previously expected. From there, however, the trajectory flattens out rather than continuing to improve.
| Year | Deficit (% of GDP) |
|---|---|
| 2024 | 5.8 |
| 2025 | 5.1 |
| 2026 (forecast) | 5.2 |
| 2027 (forecast) | 5.5 |
| 2028 (forecast) | 5.2 |
Figures are the general government fiscal balance as a percentage of GDP. 2024 and 2025 are outturns; 2026 through 2028 are the agency’s own forecasts, published 28 August 2026, and are higher than at the agency’s previous review, reflecting weaker growth, higher interest expenditure and additional defense commitments.
On our calculation, the average of the three forecast years, 2026 through 2028, works out to 5.3 percent of GDP, barely different from the 5.1 percent posted in 2025 despite the improvement recorded that year. The agency does not expect the primary deficit, which excludes interest payments, to improve at all in 2027 because of the presidential election due that year, with only modest reductions in the following years mostly offset by interest expenditure rising by an estimated 0.2 to 0.3 percentage points of GDP annually. On our calculation, the 2027 deficit is also the peak of the forecast path, at 5.5 percent of GDP, 0.4 percentage points wider than the 5.1 percent recorded in 2025. That deterioration coincides with the presidential election year in which the agency expects progress on reducing the primary deficit to stall.
That flat deficit path is what keeps debt rising. On our calculation, the projected increase in general government debt, from 115.7 percent of GDP in 2025 to 122.7 percent in 2028, amounts to an average of about 2.3 percentage points of GDP a year. The agency estimates the deficit that would be needed just to stop the debt ratio rising, the debt stabilizing deficit, at about 3 percent of GDP today, widening to about 4 percent by 2030 as interest costs increase, on our reading. On our calculation, the 5.2 percent of GDP deficit forecast for 2026 sits roughly 2.2 percentage points above that debt stabilizing level, which is consistent, mechanically, with the continued rise in debt the agency projects through the rest of the decade. The agency also modeled a scenario with no further policy changes, under which the deficit would widen to about 7 percent of GDP by 2030; on our calculation, that would run roughly 3 percentage points of GDP above the debt stabilizing level it estimates for the same year, indicating the scale of adjustment France would eventually need if deficit reduction efforts stall entirely.
Political Fragmentation and a Subdued Economy
Persistent political fragmentation in the French parliament is, in the agency’s assessment, a key rating weakness because it reduces the authorities’ capacity to deliver durable fiscal adjustment and limits policy predictability. The 2027 presidential election, and any legislative elections called afterward, are treated as an important driver of the fiscal outlook, with the baseline assumption that fragmentation persists beyond the vote and continues to constrain progress on deficit reduction.
Growth is expected to stay modest rather than provide an escape route from the debt trajectory. The agency forecasts real GDP growth of 0.8 percent in 2026, rising to 1.1 percent in both 2027 and 2028; on our calculation, that is an acceleration of 0.3 percentage points between 2026 and 2027. The agency puts France’s potential growth rate at around 1.1 percent over 2025 to 2029, meaning, on our reading, the forecast has the economy growing at, rather than above, its potential pace, which limits the scope to reduce the deficit through growth alone. The agency also flagged that recent revisions to French quarterly GDP data for the first and second quarters of 2026 point to downside risk to its own growth forecasts.
On external and financial resilience, the agency put France’s net external debt at 40 percent of GDP, the highest in its rating category, offset by a strongly positive net position in foreign direct investment and a current account it expects to stay slightly positive. It described France’s banking sector as resilient, citing diversified business models, sound earnings and solid capital and liquidity buffers, while noting that weaker growth, tighter financing conditions and rising failures among small and medium sized companies are increasing asset quality pressures that it judged manageable for now.
Markets Price a Slow Moving Risk
The rating affirmation landed the same day France’s own debt manager, Agence France Trésor, showed the cost of that borrowing. The agency’s benchmark ten year reference rate for French government bonds, known as the TEC 10, stood at 4.09 percent on 28 August 2026. Separately, Agence France Trésor’s own figures show the weighted average yield across the OATs, its medium and long term bonds spanning maturities from two to fifty years, that it has issued so far this year at 3.47 percent, as of 31 July 2026. On our calculation, the two figures sit 0.62 percentage points apart, though they measure different things, a live 10 year reference rate against a broader year to date average across all OAT maturities, and should be read as separate market gauges rather than evidence of a single trend.
Why it matters:
For France, the Stable Outlook means the agency is not yet treating the deteriorating fiscal trajectory as an immediate threat to the current rating, preserving continued access to a large and diverse investor base without an added ratings penalty for now. But the agency’s own arithmetic shows the underlying problem is not being resolved, only deferred: debt is set to keep rising through 2028 under the baseline, the deficit is not expected to close meaningfully even in the best of the next three years, and the mechanism the agency itself identifies for that, persistent political fragmentation running through the 2027 presidential election, is not something a rating affirmation can fix. The gap these figures show between the deficit forecast and the deficit that would stabilize the debt ratio means France’s debt to GDP ratio is on a rising path by construction, not by surprise, for as long as that political constraint holds.
Outlook:
Fitch said it could revise the Outlook to Negative if France fails to make substantial progress on deficit reduction, for example because political fragmentation continues, and that a further substantial rise in government debt could then lead to an outright downgrade. It also flagged that materially weaker medium term growth, including from weaker investment or competitiveness, would worsen fiscal dynamics and debt sustainability. On the upside, it said increased confidence that debt to GDP will be placed on a firm downward path over the medium term, through durable fiscal consolidation measures, stronger medium term growth, or both, could support a positive rating action. With the 2027 presidential election standing as the pivot point in the agency’s own baseline, the direction of the rating over the next two to three years is likely to hinge on what French governments formed after that vote are able to deliver on the deficit.
Sources: Fitch Ratings, “Fitch Affirms France at ‘A+’; Outlook Stable,” rating action commentary published 28 August 2026, fitchratings.com. Agence France Trésor, aft.gouv.fr/en, accessed 28 August 2026.
