International credit rating agency Moody's released a report on October 24,ining the French sovereign credit rating AA3, but lowered the rating outlook from "stable" to "negative".

Moody¡¯s has been the third major international rating agency to adjust the French sovereign credit rating recently, with both Standard & Poor¡¯s lowering the French sovereign credit rating to ¡°A+¡± and a ¡°stable¡± rating outlook.

Moody's said in the report that the downgrade outlook reflects the risk of further weakening of French institutions and governance capabilities and a regression in structural reforms.The report believes that a "long-term split in the political landscape" in France may affect the normal functioning of national institutions, while warning that the size of the French fiscal deficit will remain high over a longer period of time.

French Minister of Economy and Finance Roland Lescure said in a statement on the same day that Moody's decision showed that "it is absolutely necessary for France to reach a compromise on the budget", and the government will insist on achieving the goal of 5.4% of the gross domestic product (GDP) in 2025, and strive to reduce the deficit ratio to less than 3% of GDP by 2029.

A report released by the International Monetary Fund (IMF) on Friday showed that if the policy is not adjusted and affected by a significant rise in public debt interest spending, the French fiscal deficit is expected to expand to 5.8 per cent in 2026 and 6.2 per cent in 2027 and 2028 and to remain at around 6.3 per cent in 2029 and 2030.

Currently, France's 2026 fiscal bill is still under review in the National Assembly. The bill will be voted on by both houses of Parliament after about 70 days of discussion.