Moody's cuts France 2026 growth forecast to 0.2%

Moody's has cut its full-year 2026 GDP growth forecast for France to 0.2 percent, below the French government's target and the Bank of France's latest forecast.

The credit rating agency kept France at Aa3-Negative in late October, but said in a Tuesday report to clients that “political uncertainty, higher bond yields and fiscal challenges have constrained growth in 2026.”

The new Moody's forecast is below the government's 0.5 percent growth target. The Bank of France recently lowered its own forecast to 0.3 percent.

France's public debt stands at around 120 percent of GDP, well above the European Union limit of 60 percent. The country is also facing protests over the cost of living and demands for more spending on education and other public services.

Prime Minister Sebastien Lecornu is trying to pass a deficit-cutting 2027 budget in a parliament where President Emmanuel Macron's centrists no longer have a majority. Lecornu said Monday that the minimum wage would rise 1.6 percent to around 1,502 euros net a month, below union demands.

The French economy shrank 0.1 percent in the third quarter after stagnating in the second quarter, putting the country on the brink of recession.