France lowers its economic forecast and announces that the deficit target for 2026 can no longer be met

France’s economy will grow by just 0.5% in 2026, down from the previous estimate of 0.7%, and the government will fail to reduce the budget deficit to 5% of GDP, Finance Minister Roland Lescure announced on Friday. The official maintained the 1% growth forecast for next year.

The downward revision complicates the adoption of the 2027 budget in a deeply divided Parliament and amid presidential elections scheduled to take place in two rounds, in April and May 2027.

Lescure explained that the French economy had been affected by domestic political uncertainty, rising energy prices, extreme summer weather and higher borrowing costs. Under these conditions, the initial deficit target is no longer considered realistic, but the minister did not announce a new figure.

France will spend €65 billion this year servicing its public debt, €4.5 billion more than initially estimated. Lescure said the country is not experiencing difficulties issuing bonds, but financing costs have risen significantly.