In a significant move, credit rating agency Standard & Poor’s (S&P) has downgraded France’s credit rating from AA to A+, citing heightened risks of the government failing to substantially reduce its deficit in the coming year. The decision, announced on Friday, underscores growing concerns over France’s fiscal stability and its ability to meet budgetary targets. S&P highlighted that despite the recent submission of the 2026 draft budget to parliament, uncertainty surrounding the nation’s public finances remains alarmingly high. The agency expressed skepticism about the government’s ability to achieve significant deficit reduction without additional measures, projecting a slower-than-expected fiscal consolidation over the forecast horizon. French Finance Minister Roland Lescure responded to the downgrade by reaffirming the government’s commitment to meeting the 2025 deficit target of 5.4% of GDP. He emphasized the collective responsibility of both the government and parliament to adopt a budget aligned with this framework. Separately, the finance ministry revealed that the 2026 draft budget aims to accelerate the reduction of the public deficit to 4.7% of GDP while safeguarding economic growth. This initiative is seen as a critical step toward fulfilling France’s pledge to bring the deficit below 3% of GDP by 2029. The downgrade comes amid political challenges for President Emmanuel Macron, who faces a divided parliament as he seeks to implement deep spending cuts. His new Prime Minister, Sebastien Lecornu, recently backtracked on a contentious pension reform to avoid a no-confidence vote, further complicating fiscal reforms.