The downgrade comes as France is going through a political crisis and is struggling to cut its massive public debt.
On Tuesday, French President Emmanuel Macron appointed Sébastien Lecornu as prime minister after his predecessor, François Bayrou, was toppled a day earlier in a confidence vote over the €43.8 billion budget squeeze he proposed for next year.
“We expect the run-up to the presidential election in 2027 will further limit the scope for fiscal consolidation in the near term and see a high likelihood that the political deadlock continues beyond the election,” the agency said.
If Fitch’s downgrade is followed by the other major rating agencies, it could spell trouble for France. Moody’s and Standard & Poor’s will assess the country’s credit rating in October and November, respectively.
The government has pledged to bring the country’s deficit down to 4.6 percent of gross domestic product next year and to bring it under 3 percent, as required by EU rules, by 2029.
Economy Ministry Eric Lombard took note of Fitch’s downgrade, stressing that the French economy is solid despite the situation of its public finances and political uncertainty. He said that Lecornu was already negotiating “to adopt a budget for the nation and continue efforts to restore our public finances.”