In its latest assessment on May 30, 2025, the rating agency Standard & Poor’s (S&P) decided to maintain France’s sovereign credit rating at AA-, while retaining the negative outlook assigned in February 2025. This status quo means that France is, for the time being, immune to a further downgrade, but remains at risk of a future downgrade if the public finances do not improve.

Reasons for the decision

Unchanged Fiscal Situation: Since the last outlook change in February, there has been no significant change in the country’s fiscal trajectory. S&P is awaiting the presentation of the 2026 budget and the outcome of discussions on pension reform before making a final decision.

Expected government efforts: The government, through Prime Minister François Bayrou, must find 40 billion USD in savings for next year and has not ruled out a VAT increase to finance social spending. However, no concrete measures have yet been adopted, leaving uncertainty surrounding the government’s real ability to restore public finances.

Period of uncertainty: According to economist Eric Dor, S&P is giving the government one last chance. The rating agency is waiting for the next budgetary and political deadlines before making a decision, especially as financial markets remain calm and French borrowing rates are falling.

Meaning of the negative perspectives

Risk of downgrade: The negative outlook means that France’s rating could be downgraded in the coming months if its fiscal recovery promises are not kept.

Surveillance criteria: S&P is particularly monitoring economic growth, the implementation of pension reform, and the government’s ability to present a credible budget for 2026.

Comparison with other rating agency

Fitch: Also rates France AA- with a negative outlook, confirmed in its last review in March 2025.

Moody’s: Rates France Aa3 (equivalent to AA-) but with a stable outlook, with no recent changes.

Background: S&P downgraded France’s rating to AA- in 2024 and has maintained this assessment since then, highlighting the risks associated with debt and the public deficit.

Next steps

The government must present a comprehensive plan to restore fiscal balance by July 14. The scope and credibility of the measures announced will be decisive for S&P’s next assessment, expected in the fall of 2025. If measures are deemed insufficient, a rating downgrade remains likely.