“Political uncertainty, budgetary constraints, rising rates”: Moody’s now only expects 0.2% growth in France in 2026

French growth in 2026 could be even weaker than expected. In any case, this is the forecast of the rating agency Moody's, which expects 0.2% of GDP in an economic note published on Wednesday November 11. This outlook is darker than that of French institutions, 0.4% for INSEE, “around 0.3%” for the Banque de France and 0.5% according to the government.

In France, "growth should remain weak, at 0.2% in 2026, before gradually increasing to 0.7% in 2027 and 1.2% in 2028", projects the agency, which in April said it expected 1% in France in 2026. "Political uncertainty, the rise in bond yields, budgetary constraints and the tightening of credit conditions will continue to weigh on activity", estimates Moody's in this economic report. The rating agency, 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”.

The 0.5% objective "difficult to achieve" In an opinion on the finance bill made public in November, the High Council of Public Finances (HCFP), an independent budgetary body attached to the Court of Auditors, judged the government's growth objective of 0.5% "difficult to achieve", and a forecast of 0.3% "more likely". “It’s very amateurish”: why many economists consider the RN’s growth forecasts completely unrealistic The National Institute of Statistics (Insee) expects growth in gross domestic product (GDP) to be 0.4% for 2026, compared to “around 0.3%” for the Bank of France. In September, the Banque de France said it still expected a “rebound” in growth to 0.9% in 2027, before 1.2% in 2028.

In October, Moody's, contrary to general expectations, refrained from any rating action on French debt, effectively maintaining its assessment at Aa3 with a negative outlook. The rating agency also expects inflation to remain more contained in France than in other large European countries until 2028. It expects inflation to be 2.5% in France for 2026, compared to 3.3% in Italy, 2.8% in Germany or 3.1% in the United Kingdom.

Machine-translated from French