France cuts 2026 growth forecast to 0.5%

Economy Minister Roland Lescure announced a downgrade of France's 2026 economic growth forecast from 0.7% to 0.5%. This decision followed data showing the French economy contracted by 0.2% in the first quarter and remained stagnant in the second half of 2025. The government now finds itself trailing behind Germany, Italy, Spain, and the United Kingdom, which all recorded positive growth during the same period. Specifically, Germany posted growth of 0.4% and 0.3%, while Italy achieved 0.3% and 0.2%. France's National Institute of Statistics and Economic Studies (INSEE) further pessimized its own outlook earlier that day, lowering its projection for 2026 from 0.7% to 0.4% and stating the nation was losing ground relative to peers. Despite the contraction, Minister Lescure maintained a growth forecast of 1% for 2027. He predicted inflation would reach 2.1% in 2026 and fall to 1.8% in 2027. The revision complicates the budget as weaker growth threatens progress toward the goal of reducing the deficit to 5% of GDP by 2026, a target Prime Minister Sébastien Lecornu has described as unattainable.