Fitch Cuts France's Outlook To Negative

Fitch Ratings has revised its outlook for France's sovereign credit rating to negative, citing weaker economic growth, higher borrowing costs, and a widening budget deficit.

The ratings agency noted that French government debt is now expected to reach 124% of GDP in 2028, up from 115.7% in 2025 and exceeding previous projections.

Fitch stated that the cumulative fiscal adjustment needed to stabilize debt has increased to around 3.5% of GDP, from 3.0% in August.

France's 10-year government bond yield has climbed above 5%, with recent levels around 4.92%, signaling rising debt-service costs.

The spread between French and German 10-year bond yields has widened to over 175 basis points, the highest level since the eurozone crisis.

Fitch warned that failure to address debt or further economic decline could lead to a downgrade, with credit risk reaching levels not seen since the EU sovereign debt crisis.

The agency forecasted economic growth of 0.5% this year and 0.9% in 2027, with risks from social unrest, weak investment, and energy shocks.