France and Portugal face economic growth and productivity challenges

Economic indicators in France and Portugal signal significant challenges. In France, the national statistics institute Insee has downgraded its 2026 GDP growth forecast from 0.7% to 0.4%. This slowdown is attributed to heatwaves impacting agriculture, a decline in public works due to municipal election cycles, and stagnant private consumption. Insee warns that the French economy is “decoupling” from its European neighbors, with unemployment projected to reach 8.6% by the end of the year.

In Portugal, a study coordinated by former Prime Minister Pedro Passos Coelho identifies low productivity as the primary obstacle to sustained economic growth. The research suggests that recent growth has been driven by increased employment rather than productivity gains. Furthermore, a report by Secours Populaire Français highlights that 75% of Portuguese people in precarious financial situations cite insufficient income as the main cause. Additionally, 85% of Portuguese respondents expressed concern regarding electricity and gas bills, and 77% are worried about fuel costs.