France economic slowdown and budget deficit warning, Digi Mart USA News: France’s economic outlook is taking a sharp turn for the worse, according to a commentary by Agnès Verdier-Molinié, director of the iFrap foundation, as reported by Capital.fr. French GDP fell another 0.1% in the third quarter after dropping 0.2% in the first quarter and stagnating in the second.
In her economic commentary on Europe 1 on Tuesday, November 3, Verdier-Molinié said 2026 is a very gloomy year marked by near-stagnation. “We are not yet officially in recession, but almost.
The productive machine of France is at a standstill,” she warned.
She argued that the 0.4% growth forecast adopted by the Banque de France will not be achieved. If the French economy ends the year with growth of only 0.2%, the consequences for public finances could be serious.
The scenario that projected a deficit of 5.4% could rise to “around 5.7%,” or more than 170 billion euros.
Verdier-Molinié also said the 1% growth included in the 2027 budget documents already appears out of reach. “Why would growth in 2027 be much better than in 2026?
Unfortunately, there is no reason,” she said, adding that the presidential election is expected to lead to a period of wait-and-see until May or June.
She also criticized the 49 billion euros in additional spending approved by the National Assembly for 2027, even as the executive is already considering new savings and credit cancellations. “If in 2027 we also have 0.2 or 0.3 points of growth, we will have a deficit of 5.7, or we will have to double the planned savings,” she warned.
Verdier-Molinié attributed part of the weak activity to the level of compulsory levies and political uncertainty. She noted that, with a compulsory levy rate of 46%, France became in 2025 the European country that taxed its households and businesses the most, which she described as a “tax hammering.”
