The IMF raises its growth forecast for the euro zone, but lowers it for France

The IMF published its report on the state of the world economy on Tuesday October 13. And if the body is rather optimistic for the growth of the euro zone in 2026, France is an exception. The IMF has raised its forecasts for the main economies of the European Monetary Union. Growth is expected at 1.1% this year in the euro zone, 0.2 points more than the previous forecast in July. 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 in the Middle East and consumer confidence is weakened.

Growth in the euro zone is driven in particular by Germany, Europe's largest economy, which is recording a strong acceleration with growth revised up by 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 point) 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). 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 over each of the two years.

Impact of war in the Middle East cushioned by AI boom

On a global scale, the International Monetary Fund slightly raises its growth forecast in 2026, now expected at 3.1%, and forecasts an acceleration to 3.4% in 2027, an unchanged figure. The revision for this year comes primarily from the good performance of advanced economies, particularly Asian ones, while emerging countries are suffering from the surge in hydrocarbon prices generated by the conflict in the Middle East.

“Two forces are acting on the economy, on the one hand an increase in energy prices which creates negative supply shocks, reinforcing inflation, on the other hand investments, mainly in artificial intelligence, which generate a demand shock”, declared to the press the new chief economist of the IMF, Silvana Tenreyro.