Moody’s has maintained France’s long-term credit rating at Aa3, but left the outlook negative. The international rating agency’s decision was made after a periodic review of the rating and was reported by Agence France-Presse, citing a report.
The negative outlook means that the agency continues to see a risk of a future downgrade. France maintains its Aa rating, which is among the highest levels of creditworthiness, but remains under pressure due to the state of public finances and political uncertainty.
2027 budget is key to the rating
Moody's said in a statement that the Aa3 rating is based on the assumption that France will adopt a 2027 budget that will reduce the deficit. The agency also expects government spending and social tensions to ease somewhat in the coming months.
According to the draft budget, France's deficit is expected to be 5.4% of gross domestic product in 2026, and the government plans to reduce it to 5% in 2027. Public debt is expected to reach 119.3% of GDP this year and rise to 121.7% next year.
Government welcomes the decision
Economy and Finance Minister Roland Lescure said the decision was a recognition of the resilience of the French economy and the credibility of the budget submitted by the government for 2027. He pointed out that the fiscal plan aims to continue the recovery of public finances.
The French Finance Ministry described the maintenance of the rating as a sign of confidence in the budget plan, according to Reuters. The agency noted that a downgrade would bring Moody's assessment in line with the ratings assigned to France by Standard & Poor's and Fitch.
The next planned decision on France's rating by Standard & Poor's is on November 27, 2026. In the meantime, the government in Paris remains tasked with ensuring the adoption of the budget and meeting the deficit target of 5% of GDP.
Sources: latribune.fr, boursorama.com