French Economy Faces Potential Deadlock, Warns Minister

French Economy Minister Roland Lescure has warned of a potential economic deadlock if the government fails to achieve the fiscal consolidation outlined in its budget. The warning comes amid concerns regarding a lack of a parliamentary majority to approve the 2027 budget.

Data from the National Institute of Statistics and Economic Studies (Insee) indicates that French economic growth is projected to not exceed 0.5% in 2027. Recent figures show a 0.1% decrease in GDP during the third quarter of 2026, following stagnation in the second quarter and a 0.2% decline in the first.

The slowdown is attributed to a sharp drop in exports, which fell by 1.7% after a 2.8% increase in the previous quarter. Additionally, investments decreased by 0.6%, particularly in construction and manufactured products. While manufacturing production contracted by 1.4%, the services sector saw a slight increase of 0.3%, driven by information, communication, and transport services.