French fiscal and socioeconomic instability

France continues to face significant fiscal and socioeconomic challenges. Following a 2025 public deficit of 5.1% of GDP and public debt at 115.6% of GDP, the government’s previous goal to reduce the deficit to 5% in 2026 has proven unachievable. Economy Minister Roland Lescure has acknowledged that the public deficit will exceed 5% of GDP, despite cost-cutting measures implemented earlier in the year.

Economic growth forecasts have also been downgraded. While the government previously targeted 1% growth, it now anticipates only 0.5% for 2026, aligning with Insee’s more pessimistic estimate of 0.4%. This slowdown is attributed to geopolitical tensions, high interest rates, energy price fluctuations, and heatwaves. Looking toward 2027, officials project a modest growth recovery of 1%, though they note this remains subject to high uncertainty regarding energy markets and global stability.

Socioeconomically, the country remains in a state of paradox. While national wealth and median living standards have increased, poverty levels reached a significant peak in 2024, with approximately 9.8 million people in metropolitan France living below the poverty threshold (15.4% of the population). Economists link this to declining non-capital incomes, job instability, and eroded purchasing power.