Bercy cuts 2026 growth forecast to 0.7 percent

Paris – 07.07.2026: The French Ministry of Finance has lowered its forecast for real gross domestic product in 2026 from 0.9 to 0.7 percent. Finance Minister Roland Lescure announced the adjustment on Tuesday at the start of a meeting of the Comité d’alerte des finances publiques. The revision comes as part of the regular semiannual update of budget assumptions presented to parliamentarians as guidance for the ongoing budget process.

Lescure cited a less dynamic start to the year as the main reason. Early indicators and preliminary first-quarter data fell short of expectations. In addition, uncertainties in the international environment are weighing on export prospects and investment. In April the government had already lowered the forecast from 1.0 to 0.9 percent; today’s further 0.2-point revision is thus the second downward adjustment within a few months.

The new assumption brings the official line closer to external assessments. Economists at major banks and research institutes had increasingly expected a growth rate below one percent. In some projections the Banque de France was even slightly below the value now cited by Bercy. The government stresses that it is continuously monitoring the situation and will adjust macroeconomic parameters again if necessary.

From a budgetary policy perspective the revision is significant: lower growth reduces expected tax revenues and narrows the room for deficit reduction. Without additional countermeasures, net borrowing will rise relative to economic output. The Ministry of Budget and Finance is therefore working on clarifications of the spending side and possible consolidation measures. The revised assumptions will be incorporated into the draft finance law for 2026, which is to be debated in the autumn.

Politically the revision increases pressure in the upcoming budget debates. Priorities on investment, social spending and support for business locations are likely to be contentious. At the same time the government points to structural reforms that could provide productivity impulses and contribute to a moderate acceleration from 2027. In the short term Bercy expects muted impulses for the labor market, consumption and corporate investment, but does not expect a recession.

Attention on the financial markets remains high because growth assumptions are closely linked to the credibility of the medium-term fiscal path. The ministry expects a more reliable data basis with the next quarterly figures and updated projections from public finance watchdogs. Bercy then plans to review the macro parameters again and, if necessary, adjust them in the accompanying documents to the budget draft.