France 2026 growth forecast cut to 0.2% by Moody's

Moody's has reduced France's GDP growth forecast for 2026 to 0.2%, citing political uncertainty and fiscal challenges. This new estimate is below the government's target of 0.5% and follows a recent downgrade by the Bank of France to 0.3%. Concerns over France's public debt, which is around 120% of GDP, are growing among international investors. Protests against rising living costs are complicating the government's efforts to implement a deficit-reduction budget for 2027. Prime Minister Sébastien Lecornu announced a modest minimum wage increase to address social tensions, but Moody's warns that political instability may hinder effective policy responses.