France’s Economy and Finance Minister lowers 2026 growth forecast to 0.5%

China News Service, Paris, September 11 (Reporter Li Yang) French Minister of Economy and Finance Lescure said on the 11th local time that France's economic growth forecast for 2026 has been lowered from 0.7% to 0.5%.

Lescure held a press conference that day to explain the performance of the French economy. He listed the main factors affecting current economic activities, including French municipal elections that have affected the pace of local investment; domestic political uncertainty in France dragging down the economic slowdown; the war in the Middle East and the fuel crisis are far from over; and the ecological crisis has impacted the economy.

Lescure described the French economy's "uncertainty" as unprecedented. He said that it is no longer possible to achieve the goal of controlling the public deficit at 5% of GDP in 2026. He also reiterated the need for France to complete the formulation and review of the 2027 budget as soon as possible.

On the 10th, the French National Institute of Statistics and Economic Research lowered its forecast for French economic growth this year from 0.7% to 0.4%. The report released by the agency is not optimistic about the French economic prospects, believing that compared with the good performance of the economies of neighboring countries such as the United Kingdom, the French economy has stagnated. The report cites the example of France facing a more severe heat wave impact than its neighboring countries, with agriculture in particular suffering a blow. The report predicts that France will return to moderate growth by the end of 2026.

The agency also pointed out that France's inflation rate reached 2.4% in August and may rise to 2.9% by the end of the year; natural gas prices will rise significantly by the end of the year, pushing up the inflation rate. Rising energy prices will also affect prices of manufactured goods and operating costs in industries such as transportation. (over)