France was downgraded by Scope Ratings in another warning on the state of the country’s finances and the political impediments to containing a ballooning budget deficit, according to Bloomberg News.
The Europe-based credit rating agency lowered France’s rating to AA- from AA with a stable outlook, that is three levels below the top rating.
“Sustained deterioration of public finances and challenging political outlook drive the downgrade,” Scope said in a statement on Friday.
Scope also flagged political risks with regard to the French presidential elections.
“Stronger opposition in parliament is likely to curb the government’s ability to reduce public spending and raise potential GDP growth, especially as the 2027 presidential election approaches,” Scope added.
Credit ratings agency Fitch has previously revised France’s outlook to “negative” from “stable,” citing increases in fiscal policy and political risks.
In a bid to stabilise the situation, Prime Minister Michel Barnier’s government unveiled the 2025 budget plan, outlining €60 billion in spending cuts and tax hikes aimed at reducing the deficit to 5% of GDP, down from 6.1% this year. That marks the first step toward bringing the deficit within the EU’s 3% threshold by 2029, a target the previous government had committed to achieving by 2027.
