French government forecasts 1% growth in 2027: what do experts think?
France's High Council for Public Finance calls the government's 1.0% growth forecast for the 2027 budget "optimistic", as economists warn of a possible "slippage" and the executive still has to secure approval.
The French government has forecasted a modest 1% economic growth in 2027, but this projection has raised eyebrows among experts. The High Council for Public Finance (HCFP), chaired by Amélie de Montchalin, believes this forecast is overly optimistic due to significant uncertainty surrounding the domestic situation and the adoption of the 2027 budget.
The government aims to reduce the public deficit to 5.0% of GDP in 2027, from 5.4% in 2026, by implementing measures totaling 54 billion euros, including 25 billion euros in spending cuts and 18 billion euros in additional revenue. However, the deficit of central government is expected to widen to 5.0% of GDP in 2027, largely due to higher debt-servicing costs, defense spending, and contributions to the EU budget.
The government also plans to improve the deficit of local authorities slightly, narrowing it to 0.1% of GDP from 0.2% in 2026. While most measures are focused on the social security system, such as partial pension freezes and cuts to family benefits, the trajectory rests on several optimistic assumptions, including GDP growth of 1% and an average rate of 4.3% for 10-year government bonds.
Experts caution that this forecast is risky due to factors like weaker economic growth, higher interest rates, and potential social movements.
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