New parliamentary elections are likely to be called in France in the second half of 2025, Report informs referring to the international rating agency Fitch Ratings.
Fitch Ratings has affirmed France's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'AA-' with a Negative Outlook.
"We estimate that France's budget deficit widened to 6.0% of GDP in 2024, significantly exceeding the original target of 4.4% and more than double the 'AA' median. We forecast that deficits will remain sizeable at 5.6% of GDP in 2026 and 5.4% in 2027, given the lack of detail on medium-term fiscal consolidation and expected political challenges to getting the 2026 budget approved."
"We forecast that general government debt will exceed 120% of GDP by the end of 2028, the second-highest of 'AA' rated sovereigns and more than double the forecast 'AA' median," Fitch noted. "Political deadlock and polarisation have intensified in France following the 2024 snap elections and collapse of the Barnier government over the 2025 budget bill. The current center-right coalition led by Prime Minister Bayrou lacks an absolute majority in a highly fragmented National Assembly, complicating economic and fiscal policy-making. We anticipate new elections will likely be called in 2H25. However, the outcome and economic policy implications are highly uncertain."
"We have lowered our growth forecasts compared with our last review for 2025 to 0.6% from 1.2% and for 2026 to 0.9% from 1.3%."