On October 24, 2025, by lowering the outlook for the French rating to negative, Moody's explained what could lead it to reduce the rating itself in the future, while then hoping for 2026 growth of 1% in France and inflation of 1.4%. Inflation rose to 3.1% year-on-year in September and annual growth was severely revised downward by INSEE, to 0.4%, after a first half close to recession.
Thursday at the close of the Paris Stock Exchange, the yield on ten-year French debt stood at 5.07%, or 1.74 points more than the rate of Germany, considered the most solid European borrower. The day before, this rate had exceeded the 5% threshold for the first time since 2002.
The situation also takes place in a context of strong social discontent, marked by violence and looting last weekend, the images of which stunned France and beyond the country's borders.
France, which will have to repay 91 billion euros of interest next year for the debt interest charge, still manages to find lenders, but at an increasingly expensive cost.
Economists see little reason for the rating agency not to lower it, in a context where the public deficit should ultimately reach 5.4% of gross domestic product this year. The agency had argued that the public deficit of 5.1% of GDP in 2025 is lower than its forecast, which makes the target of 5% in 2026 more achievable.
On April 10, although the conditions for a rating downgrade seemed to be met, particularly with the suspension of the pension reform, Moody's nevertheless maintained its rating. The rating agency Moody's issues its opinion on France's rating on Friday October 23, while French public finances have further deteriorated.