France is getting its paws kicked by Standard & Poors. Rating downgraded to A+

Standard & Poors on Friday downgraded France's credit rating from AA- to A+ with a stable outlook (upgraded from negative) amid expectations that its debt will rise higher than previously expected in the coming years.

S&P expects that France will achieve its budget deficit target of 5.4% this year.

However, “in the absence of significant additional measures to reduce the budget deficit, fiscal consolidation in our forecast horizon will be slower than previously expected,” it was written late on Friday evening.

The agency expects public debt to reach 121%. GDP in 2028, up from 112 percent GDP at the end of last year.

“In our view, uncertainty about public finances remains elevated ahead of the 2027 presidential elections.” – it was written in the statement.

In response to the downgrade, Finance Minister Roland Lescure said that “it is now the collective responsibility of the government and parliament to adopt a budget that meets the 5.4% deficit target by the end of 2025.”

The downgrade of the French sovereign rating is the third in recent weeks and puts pressure on Sébastien Lecornu's budget plans.

As the Financial Times writes, the S&P rating downgrade occurred just a few days after Prime Minister Sébastien Lecornu maintained the fragile government in France at the expense of suspending Emmanuel Macron's proposed pension reforms.

The British newspaper reminds that France plunged into a political crisis when President Macron called and lost early elections in June 2024, without creating a clear majority in parliament.

Lecornu is the fourth prime minister since being elected after his predecessors were ousted by opposition groups over disagreements over how to deal with France's growing public debt.

Lecornu – a close Macron ally – resigned as prime minister and was reappointed within a week, underscoring France's deepening political instability.

“We expect political uncertainty to impact the French economy, driving investment activity and private consumption, and thus economic growth,” wrote the S&P rating agency in a statement. (PAP Business)

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