On October 17 (local time), international credit rating agency Standard & Poor's (S&P) downgraded France’s sovereign credit rating by one notch, from AA- to A+.
According to foreign media reports, S&P lowered the rating due to concerns that the French government may not be able to significantly reduce its deficit next year.
S&P pointed out that although the 2026 budget bill was submitted to parliament this week, uncertainty regarding the French government's finances remains high. The agency added, "While the target for the general government fiscal deficit this year-5.4% of GDP-appears achievable, fiscal consolidation will proceed more slowly than previously expected unless substantial additional deficit reduction measures are implemented."
The French government has drawn up the 2025 budget to reduce last year’s fiscal deficit of 6% of GDP to 5.4% this year by drastically cutting public spending and securing additional tax revenue through temporary tax hikes on large corporations and the wealthy. However, fierce public backlash has led to clashes between protesters and police in the streets, and in the political sphere, there have been calls for the entire cabinet to resign and for a vote of no confidence against the prime minister.
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