Moody’s keeps France at Aa3, but leaves its negative outlook in place
Moody’s held France’s sovereign rating at Aa3, despite market expectations of a downgrade, while retaining a negative outlook. The agency said its rating assumes France will adopt a 2027 budget that reduces the deficit, with borrowing costs and social tensions easing; the decision gives the government time, not a clean bill of health.
Bottom line — France’s Aa3 rating now rests on approval of a deficit-cutting 2027 budget.
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Moody’s cited France’s wealthy, diversified economy and strong public institutions, while flagging rising debt, political fragmentation and weaker debt-servicing metrics.
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France’s 10-year borrowing rate rose above 5.1%, its highest level since 2002, according to Euronews.
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Natixis rates strategist Théophile Legrand said the negative outlook leaves the risk of a downgrade in place.
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Economy Minister Roland Lescure said the government aims to pass a budget by year-end that brings the deficit down to 5%.
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Moody’s decision contrasted with the harsher credit assessments of S&P and Fitch, Le Monde reported.
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