Fitch Ratings: France’s ambitious consolidation package unlikely to pass as proposed

Fitch Ratings: France’s ambitious consolidation package unlikely to pass as proposed

Fitch Ratings has recently expressed skepticism regarding France’s ambitious consolidation package, suggesting that it is unlikely to pass in its current form. The agency’s analysis, released on July 2, 2025, highlights several key factors that contribute to this outlook.

Fitch Ratings notes that the proposed package includes significant tax cuts and reforms aimed at stimulating economic growth and addressing budget deficits. However, the agency is concerned about the potential fiscal implications of these measures. The current economic climate, characterized by high inflation and geopolitical uncertainties, adds to the complexity of implementing such a package.

The agency’s report also points out that France's public debt levels are already high, with the debt-to-GDP ratio at 115% in 2024. This high debt level, combined with the proposed tax cuts, could exacerbate fiscal pressures and potentially lead to a downgrade in France’s credit rating.

Moreover, Fitch Ratings is cautious about the sustainability of the proposed measures. The agency suggests that the tax cuts and reforms may not be sufficient to stimulate the desired economic growth and could instead lead to increased public spending and further budget deficits.

In conclusion, while France’s consolidation package aims to address key economic challenges, Fitch Ratings’ analysis indicates that the current proposal is unlikely to pass as presented. The agency’s concerns about fiscal sustainability and the potential impact on France’s credit rating underscore the need for a more balanced approach to economic policy.

References:
[1] https://economictimes.indiatimes.com/industry/banking/finance/banking/rbis-commitment-to-keep-sufficient-liquidity-will-facilitate-rate-cut-transmission-fitch/articleshow/122557905.cms
[2] https://www.globenewswire.com/news-release/2025/07/14/3115026/0/en/Akropolis-Group-has-maintained-the-credit-rating-from-Fitch-Ratings-with-a-stable-outlook-for-five-years-in-a-row.html
[3] https://armbanks.am/en/2025/07/20/265280/