The IMF more optimistic for the euro zone economy in 2026, except for France

While the government of Sébastien Lecornu has started the battle for the 2027 budget, Paris received a yellow card from the International Monetary Fund this Tuesday. Despite the impact of the war in the Middle East, the institution is indeed a little more optimistic for the growth of the euro zone in 2026 and raises its forecasts for the main economies of the monetary union with the exception of France.

Energy prices that remain high

Growth is expected at 1.1% this year in the euro zone, 0.2 points more than the previous forecast in July, details the IMF in its new report on the state of the world economy (WEO) published on the occasion of its annual meeting organized in Bangkok.

With 1.2% forecast in 2027, an unchanged forecast, it would return to its 2025 growth level while energy prices remain high in the wake of the war between the United States and Iran and consumer confidence is weakened.

Growth in the euro zone is driven in particular by Germany, the largest European economy, which is recording a strong acceleration with growth revised upwards of 0.6 points to 1.3%. It would stand at 1.1% in 2027 (+0.1). Spain confirms its dynamism: its growth should reach 2.5% this year (+ 0.4 points) before declining to 1.8% in 2027, an unchanged forecast. Italy is also benefiting from an improvement, with growth expected at 0.8% (+0.3 points) in 2026 and 0.6% in 2027 (+0.1).

High inflation

On the other hand, France is going against the tide: a few months before a major presidential election and plagued by budgetary difficulties, the second economy in the euro zone is expected to grow by only 0.4% in 2026 and 0.7% next year, a downward revision of 0.2 points in each of the two years.

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Risks weigh on these growth forecasts. Thus, “a stagnation or a new escalation of conflicts in the Middle East or in Ukraine could in particular prolong the increase and volatility in the prices of raw materials, further fueling inflation”. Inflation is expected at 3.1% in 2026 in the euro zone and 2.8% next year, higher than the 2% target set by the European Central Bank.