The French economy stalls, a bad omen for the budget: the Minister of Public Accounts says more effort is needed than in the original text

The Minister of Action and Public Accounts David Amiel warned on Friday that the budget for 2027 would require "more efforts" than those provided for in the government text, after the announcement in the morning by INSEE of a decline of 0.1% in GDP in the 3rd quarter. Gross domestic product had already fallen by 0.2% in the first quarter, and stagnated in the second. Expected by forecasts to be +0.1%, the third quarter disappoints again, and the country is very close to recession.

“The conclusion of all this is that in 2026, the French economy is at a standstill,” noted Economy Minister Roland Lescure on France Info. Public deficit objective of 5% This "bad news for economic growth" is an "additional reason to make budgetary efforts", added his colleague from Bercy David Amiel on Friday, in the hemicycle of the National Assembly, who is currently debating the draft State budget for 2027. Because less growth means less tax revenue for the State, therefore a deficit and a debt which are widening.

“Compared to what was tabled in the initial text we will have to have more budgetary efforts, not less. More efforts in spending, more efforts in revenues,” he added, specifying that these developments could be discussed during parliamentary debates. “When we see the deterioration of the economic situation, to which is added the deterioration of the financial situation since last summer, more budgetary efforts will be required,” he insisted.

In its initial copy, the government defended 43 billion new measures of effort, hammering out the objective of a deficit of 5% of GDP next year. The problem is that additional savings could further dampen growth and prevent the economy from recovering. From now on, "we no longer have any room for maneuver so we will have to consolidate the budget without growth", which "will be very complicated and very difficult because any additional effort is more recessive but it is necessary" because "the markets are attached to the idea that we have a budget", explains Anthony Morlet-Lavidalie, economist at Rexecode.

The effects of the drop in growth on the public accounts The contraction of the economy in the third quarter has indeed raised fears of a more pronounced slippage than expected in the public deficit in 2026, previously expected at 5.4% of GDP. “It will surely be a little more, it will deteriorate because less growth means less revenue,” recalls economist Sylvain Bersinger. And the lack of dynamism in growth over the first three quarters of 2026 risks being felt at the end of the year and next year.

Machine-translated from French