Free warning from Fitch: where are the French debt ratings?

France thought it would not have to deal with rating agencies for a month, between the update of its rating by Moody's last week and that of S&P expected on November 27. This was without counting on Fitch Ratings, which published a review of its rating of French debt on Friday outside of the previously set timetable. The rating agency explains that it can do this “in situations where there is a significant change in the solvency of the issuer”, here to send a warning to France.

Certainly, Fitch maintains its rating at A+, i.e. superior average quality debt. But it downgrades its outlook from stable to negative, indicating that it plans to lower its rating if there is no improvement. In a press release, it points to “lower growth, further budgetary deterioration and higher yields”, raising its estimate of the debt/GDP ratio in 2028 to 124%, compared to 122.7% in its last opinion.

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“Persistent political fragmentation and a difficult social context increase the complexity of implementing sustained budgetary consolidation,” adds Fitch, while a new day of social mobilization is planned for this Saturday, October 31, and the 2027 finance bill is being debated in Parliament.

“This assessment confirms the absolute necessity of adopting a responsible budget by the end of the year, which aims to restore the public accounts by reducing our deficit to 5%,” reacted the Minister of the Economy Roland Lescure, assuring that “the government is determined to continue on a trajectory of budgetary consolidation.”

Same rating for S&P, Moody’s more lenient

The Standard & Poor's agency, which is due to update its assessment of France on November 27, currently gives it the same rating as Fitch (A+), but with a still stable outlook.

Last week, economists expected to see Moody's sanction French debt with a rating equivalent to those of S&P and Fitch. But the latter was content to keep it at the higher level, “Aa3 with negative outlook”, that is to say “good” but with a risk of deterioration.

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Moody's had explained its leniency by its "hypothesis that a 2027 budget reducing the public deficit will be adopted" and that social tensions "will moderate somewhat in the coming months", waiting for the situation in France to become clearer before modifying its rating.

Machine-translated from French