France: Avoids Moody’s Downgrade.

Moody’s maintained France’s long-term foreign-currency sovereign credit rating at Aa3, defying expectations of a downgrade, but kept the outlook negative. The agency cited slower growth and a higher deficit, which have pushed the country’s debt burden above previous projections, as well as rising bond yields and social protests that could hinder fiscal consolidation. French yields have risen more than those of any other developed economy this month, reaching a 24-year high. France’s deficit is projected to reach 5.4% of GDP this year, as political gridlock, sluggish growth and rising interest costs undermine efforts to rein in public debt. Moody’s expects a deficit-reducing 2027 budget to be adopted despite the challenging political and social environment. The rating remains one notch above those of S&P and Fitch, which downgraded France during a budget dispute in autumn 2025. Last month, Scope Ratings also downgraded France, while Morningstar DBRS revised its outlook to negative.