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IMF lowers France's economic growth forecast, warns of high uncertainty in the country

IMF lowers France's economic growth forecast, warns of high uncertainty in the country

金十金十2026/05/21 13:40
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Golden Ten Data reported on May 21 that the International Monetary Fund (IMF) has downgraded France's economic growth forecast for this year, as the impact of the Iran war has affected economic activity and uncertainty continues to rise ahead of next year's presidential election. The IMF expects the country's GDP to grow by 0.7% in 2026, down from last month's forecast of 0.9%. The organization stated that short-term risks to this forecast are currently tilted to the downside. In its statement, the IMF said: "New negative factors brought by the Middle East war are beginning to weigh on economic activity. As a result of this shock, business investment and household consumption are expected to slow, and, coupled with widespread wait-and-see attitudes ahead of the 2027 general election, this trend is set to continue." The IMF also warned of the risks facing France’s efforts to reduce its budget deficit. In recent years, these efforts have stalled as successive governments have struggled to push through austerity measures in a divided parliament. This instability has triggered sell-offs in the bond market, causing France's financing costs to rise relative to other countries. According to the IMF, the upcoming elections may provide France with an opportunity to establish a credible fiscal consolidation plan, but at the same time, it warns that heightened political uncertainty could delay related efforts in the short term.
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