Moody's expected to downgrade France's credit rating on Friday

Moody's is expected to downgrade France's credit rating on Friday evening, given the deteriorating state of public finances. The agency currently rates France "Aa3" with a negative outlook, indicating good debt quality but with a risk of degradation. Fitch and S&P already rate France one notch lower at A+. Economists consider a Moody's downgrade to A1 "very plausible," citing the worsening deficit, rising inflation, and weak growth. The public deficit is projected at 5.4% of GDP this year, with inflation at 3.1% and growth revised down to 0.4%. France's ten-year borrowing yield has exceeded 5% for the first time since 2002, and the spread with German bonds hit a record high since 2011. Debt is projected to reach 121.7% of GDP by 2027, raising concerns of "financial strangulation" amid political and social instability.