Fitch Ratings kept France’s sovereign debt rating at A+ but lowered its outlook to negative from stable, citing weaker growth, higher borrowing costs, a larger deficit, political fragmentation and social unrest. Insee reported that gross domestic product fell 0.1% in the third quarter after stagnating in the second quarter and contracting 0.2% in the first. Fitch said the fiscal adjustment needed to stabilize debt had risen to around 3.5% of GDP from 3.0% in August, while the deficit is set to reach 5.4% of economic output in 2026. Economy and Finance Minister Roland Lescure said the government must adopt a responsible budget by the end of the year, targeting a deficit of 5% or less and fiscal consolidation. Prime Minister Sebastien Lecornu has proposed a finance bill targeting a 5% deficit in 2027, but its passage remains uncertain because the government lacks a parliamentary majority and a presidential election is approaching. Fitch said constitutional mechanisms could enable adoption, while an ordinance could reduce short-term uncertainty without restoring long-term fiscal credibility. France’s 10-year bond yields rose more than those of any other developed economy in October, reaching a 24-year high, and the spread over German debt reached 178 basis points before narrowing to about 165 basis points on Oct. 30. Moody’s Ratings retained its higher rating and negative outlook, while Fitch’s next scheduled review is due by the end of February.