France cuts 2026 growth outlook to 0.7%

France has cut its forecast for 2026 gross domestic product growth to 0.7%, reducing its outlook from a projection of 0.9% published in April. The change reflects a reassessment of the economic trajectory after a weaker than expected start to the year.

Finance Minister Roland Lescure said the revision "takes account of a less favorable than expected start to the year" and noted that both a delayed budget process and the conflict in the Middle East have held back economic output. He also pointed to inflation and consumption data as relatively more encouraging, even as overall growth expectations were scaled back.

Officials highlighted that the delayed approval of the budget has weighed on activity, adding uncertainty and slowing implementation of public spending plans. At the same time, the Middle East conflict has been identified as an external shock, contributing to a more challenging international environment for the French economy.

The revision follows a weaker than anticipated first quarter, which prompted the government to reassess how much momentum the economy could realistically regain over the remainder of 2026. The authorities cited these combined domestic and international headwinds as justification for adopting a more cautious baseline.

The downgraded forecast was presented on July 7, 2026, during a meeting of the committee d’alerte des finances publiques held under Prime Minister Sébastien Lecornu. This committee is tasked with monitoring public finances and serves as a forum to evaluate the implications of growth and budget developments.

With the new 0.7% projection, the government’s outlook is broadly aligned with forecasts from Insee, the International Monetary Fund and the Organisation for Economic Co-operation and Development. In contrast, the Banque de France had previously projected a lower growth rate of 0.5% for 2026, indicating a more cautious central bank view than that of the government and other institutions.

While officials described inflation and household consumption trends as relatively more encouraging, the weaker first quarter and unsettled international environment have led to a more restrained expectations profile for 2026. The updated forecast underlines the sensitivity of the growth outlook to both domestic fiscal timing and external geopolitical risks.

The reassessment of growth prospects provides an important reference point for fiscal planning and public finance oversight. By bringing its forecast closer to that of major statistical and international bodies, the government has signaled a more conservative stance on the pace of economic expansion expected next year.