French government cuts 2026 growth forecast to 0.5%, clouding deficit reduction
Macro
France's Economy and Finance Minister Lescure said on the 11th that the government is lowering its 2026 economic growth forecast to 0.5% from the previous 0.7%, while keeping its 2027 forecast unchanged at 1.0%. The worsening growth outlook may make it even harder for the government to achieve its plan of reducing the fiscal deficit to 5.0% of GDP in 2026. Lescure told reporters, "This year we have been hit by an extremely serious crisis involving four types of shocks," adding, "We are operating under severe fiscal constraints, and there is no room left to cut further." The government aims to secure parliamentary passage of the 2027 budget within a few months, but the deteriorating economic outlook is likely to make that an uphill battle.
