Moody’s forecasts only 0.2% growth in France for 2026

The rating agency Moody's published, on Wednesday November 11, an international macroeconomic situation note which sets out a gloomy growth outlook for France in 2026 than that of national institutions. The agency anticipates an increase in Gross Domestic Product (GDP) of only 0.2%, a figure which contrasts with the forecasts of INSEE (0.4%), the Banque de France (“around 0.3%)” and the government (0.5%).

This estimate from Moody's is also below its own forecast from April, which expected 1% growth for France in 2026. The agency projects that "growth should remain weak, at 0.2% in 2026, before gradually increasing to 0.7% in 2027 and 1.2% in 2028".

She explains this weakness by several factors: “Political uncertainty, rising bond yields, budgetary constraints and tightening credit conditions will continue to weigh on activity.” Moody's, however, expects “a moderate recovery in 2027, hampered by restrictive credit conditions, with growth strengthening to reach its trend rate of around 1.2% in 2028”.

French institutions display slightly more optimistic forecasts. The National Institute of Statistics (Insee) expects GDP growth of 0.4% for 2026, while the Banque de France anticipates “around 0.3%”. The latter had also indicated in September to expect a “rebound” in growth to 0.9% in 2027, then to 1.2% in 2028. For its part, the High Council of Public Finances (HCFP), an independent budgetary body, had judged in November the government's growth objective of 0.5% “difficult to achieve”, estimating that a forecast of 0.3% would be “more likely”.

Lower inflation in France than in Europe

Concerning inflation, Moody's expects it to remain more contained in France than in other large European countries until 2028. For 2026, the agency forecasts 2.5% inflation in France, compared to 3.3% in Italy, 2.8% in Germany or 3.1% in the United Kingdom. In 2027, French inflation would be 2%, again lower than that of other European nations (Italy 2.8%, Germany 2.6%, United Kingdom 3.4%). The trend would continue in 2028, with 1.8% in France, compared to 2% in Italy, 2.1% in Germany and 2.3% in the United Kingdom.

Machine-translated from French