Paris: Rating agency Fitch has downgraded France's long-term sovereign credit rating from AA- to A+, maintaining a stable outlook. The agency highlighted several factors contributing to this decision, including a high and increasing government debt ratio, political fragmentation, a weak fiscal record, and projected high deficits in 2025.

According to Namibia Press Agency, Fitch emphasized that the recent failure of the French government in a confidence vote has underscored the growing fragmentation and polarization within domestic politics. This political environment is seen as weakening the system's ability to implement effective fiscal consolidation.

Fitch expressed skepticism about the outgoing government's target to reduce the headline deficit to 3 percent of GDP by 2029, suggesting it is unlikely to be achieved. The agency projected that France's debt would escalate to 121 percent of GDP by 2027, up from 113.2 percent in 2024, with no apparent path to debt stabilization in the subsequent years.

Despite these challenges, Fitch maintained its forecast for real GDP growth at 0.6 percent in 2025. In response, the French Ministry of Economy, Finance and Industrial and Digital Sovereignty issued a press release indicating that Minister Eric Lombard has "taken note" of the downgrade while emphasizing the fundamental strength of the French economy.

With the appointment of new Prime Minister Sebastien Lecornu, the French government has initiated consultations with political forces in Parliament to adopt a budget aimed at continuing efforts to restore public finances, the ministry stated.