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France cuts 2026 growth forecast to 05 percent
The French government has announced a downward revision of its economic growth forecast for 2026 to 0.5 percent, down from its previous estimate of 0.7 percent, amid declining economic confidence and rising borrowing costs. France also projects a growth rate of 1 percent for 2027, with inflation expected to rise to 2.1 percent in 2023 before decreasing to 1.8 percent in 2027. The French Finance Minister has acknowledged that the target of reducing the budget deficit to 5 percent of GDP this year is no longer feasible, as the deficit exceeds that level, necessitating the adoption of a 2027 budget before the end of 2023. These projections follow earlier revisions, in which the government lowered its growth forecast from 1 percent to 0.7 percent. The French economy is under pressure from rising bond yields and financial challenges, while the Bank of France warns that canceling part of the debt would be illegal and could threaten the stability of the European Economic Area.
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