Moody's dampens France's growth hopes: the American rating agency is pessimistic for the French economy and only forecasts 0.2% in 2026, while the government is still targeting 0.5%
In an economic note, the rating agency Moody's indicated on Wednesday that it expected an increase of 0.2% in French GDP in 2026, while it was still counting on 1% in April.
The rating agency Moody's draws a darker outlook than French institutions for growth in France in 2026, in an international macroeconomic situation note published on Wednesday: it only expects an increase of 0.2% of GDP, while INSEE still anticipates 0.4%, the Banque de France "around 0.3%" and the government 0.5%. 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”. Inflation more contained than elsewhere in Europe In an opinion on the draft finance law 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". The National Institute of Statistics (Insee) expects growth in gross domestic product (GDP) at 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 major European countries until 2028.
It expects 2.5% inflation in France for 2026, compared to 3.3% in Italy, 2.8% in Germany or 3.1% in the United Kingdom.
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- BFM Business11 Nov, 14:03
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