Moody's maintains France's credit rating amid economic and political volatility

On October 24, 2026, the credit rating agency Moody’s decided to maintain France’s credit rating at Aa3, while keeping the outlook as negative. This decision surprised many market analysts who had anticipated a downgrade to the A1 grade, which would have aligned the agency with the A+ ratings previously assigned by Fitch and S&P.

Despite avoiding an immediate downgrade, France faces significant macroeconomic challenges, including a projected 2026 fiscal deficit of 5.4% of GDP and public debt expected to reach 119.3% by year-end, potentially rising above 121% in 2027. Economic growth for 2026 is forecasted at a stagnant 0.4%. The government is currently navigating a period of political deadlock, persistent nationwide protests, and rising government bond yields, which have reached multi-decade highs.

The future remains uncertain as the government attempts to implement fiscal consolidation measures to reduce the deficit to 5% of GDP in the 2027 budget. Analysts warn that the current lack of political consensus and ongoing pressure on the bond market may lead to further negative rating actions in the near term.