While the economies of its main European neighbours continue to grow, France is an exception.The government has cut its growth forecast for 2026 to 0.5%, from 0.7% previously, and now expects growth of 1% in 2027, economy minister Roland Lescure said on Friday. The government is also projecting inflation of 2.1% this year and 1.8% next year.
This downward revision makes the government’s budget equation more complicated. Weaker growth is likely to weigh more heavily on the public finances, even though the government had set itself the goal of bringing the deficit down to 5% of GDP in 2026, from 5.1% in 2025. Prime Minister Sébastien Lecornu had already admitted he was not "very optimistic" about hitting that target.
The new forecasts come a day after even more pessimistic projections from Insee. The statistics office has lowered its forecast for 2026 growth from 0.7% to 0.4%, warning that the French economy is "losing ground".
After a start to the year marked by a 0.2% decline in GDP in the first quarter, followed by flat activity in the second, the situation contrasts sharply with that of the main neighbouring economies. Over the first two quarters, Germany posted growth of 0.4% and then 0.3%, Italy 0.3% and then 0.2%, and Spain 0.6% and then 0.7%. The United Kingdom grew by 0.6% and then 0.4%.
