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

Moody's is expected to downgrade France's credit rating on Friday, October 23, 2026, with experts viewing a downgrade as highly credible due to deteriorating public finances and social unrest. The announcement is due in the evening. The agency currently rates France at "Aa3 with a negative outlook," while Fitch and S&P already rate it one notch lower at A+. Economists cite a worsening budget deficit, rising inflation, and a sharply reduced growth forecast as key factors, alongside conditions Moody's previously outlined for a downgrade, including persistent fiscal challenges and a stalled pension reform. French bond yields have surged above 5% for the first time since 2002, and the spread with German bonds has reached levels unseen since 2011. While global factors like oil prices and AI investments are pushing rates up worldwide, France's political instability and debt trajectory are intensifying investor concerns.