France’s unrest pushed government borrowing costs to their highest level since 2002 and widened the spread with German bonds to its widest since November 2011. Moody’s kept the country’s Aa3 credit rating but maintained a negative outlook linked to political fragmentation, which could return to stable if the budget deficit narrowed. The government targets a deficit of 5% of GDP in 2027, down from a projected 5.4% in 2026, and could invoke Article 49.3 to pass its budget despite opposition. Protests on October 24 and a national strike on November 5 threaten already weak growth, forecast at 0.3% in 2026 and 0.6% in 2027. The CAC 40 has fallen 4.5% in a month, with retail, hospitality, tourism, transport and logistics particularly exposed, while more than 2,000 businesses are reported to have been directly affected.
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