France cuts 2026 growth forecast to 0.7% and announces €3bn in budget savings
The French government has revised its 2026 GDP growth projection down to 0.7% from 0.9%, citing a delayed budget and the Middle East conflict, and unveiled €3 billion in additional spending cuts to keep its deficit target on track.
Forecast downgrade
On Tuesday, Finance Minister Roland Lescure announced the second downward revision this year, lowering the 2026 growth forecast to 0.7% from the 0.9% set in April. The move came during a meeting of the public finance alert committee chaired by Prime Minister Sébastien Lecornu.
This revision takes into account a less favourable start of the year than anticipated, linked in particular to the special budget legislation, as well as the international situation, notably the conflict in the Middle East, even if the signals on inflation and consumption are more encouraging.
Budget savings
To offset weaker tax receipts, the government also announced €3 billion ($3.4 billion) in additional budget cuts for this year. France is targeting a deficit of 5% of GDP in 2026, and the lower growth trajectory threatens that goal.
External forecasts align
The new 0.7% figure matches projections from INSEE, the IMF, and the OECD. The Banque de France is more pessimistic, having cut its own forecast to 0.5% in mid-June, partly because it did not factor in the potential impact of the US-Iran agreement.
- Government forecasts 1.0% GDP growth
- Government cuts forecast to 0.9%
- Banque de France cuts forecast to 0.5%
- Government cuts forecast to 0.7%
Institutional gathering
The alert committee, created in 2025 to improve public finance oversight, brought together ministers for public accounts, labour, health, and territorial planning, along with lawmakers, local officials, and union representatives.
- Government
- 0.7 %
- INSEE
- 0.7 %
- IMF
- 0.7 %
- OECD
- 0.7 %
- Banque de France
- 0.5 %
