In a staff concluding statement for the 2026 Article IV mission to France, the International Monetary Fund said the French economy continued to expand in 2025 but is facing new headwinds from the war in the Middle East, while fiscal consolidation is progressing too slowly and remains exposed to implementation risks. Staff projected real GDP growth of 0.7 percent in 2026 after 0.9 percent in 2025 and recommended a clearly specified multi-annual strategy, including frontloaded structural adjustment of about 0.8 percent of GDP a year over 2027-29, to bring the deficit below 3 percent of GDP by 2029 and put debt on a downward path. The statement noted that the fiscal deficit fell to 5.1 percent of GDP in 2025, below the initial target, but that the 2026 budget, while compliant with EU rules, falls short of the original plan because further reforms lacked political support. Staff judged France's response to the Middle East energy shock appropriate so far and said any additional measures should remain limited, temporary and targeted to vulnerable groups. Given the already high tax burden, it recommended that further adjustment come mainly from reprioritising spending rather than broad tax increases, with health, education, unemployment benefits and pensions identified as key reform areas. It also called for structural reforms to reduce regulatory barriers, mobilize private savings for productive investment and strengthen labor supply, while continuing to monitor non-bank financial interlinkages and cyber risks as banks remain resilient. The statement reflects preliminary IMF staff views rather than those of the Executive Board. Staff will prepare a report for Executive Board discussion and decision, subject to management approval.
International Monetary Fund2026-05-21
International Monetary Fund staff urges France to frontload about 0.8 percent of GDP a year of fiscal consolidation and adopt a new multi-year plan
The International Monetary Fund staff, in its 2026 Article IV concluding statement on France, reported slowing growth and warned that fiscal consolidation is too gradual and exposed to implementation risks. Staff projected real GDP growth of 0.9 percent in 2025 and 0.7 percent in 2026, and recommended a clearly specified multi-year strategy with frontloaded structural adjustment of about 0.8 percent of GDP annually over 2027-29 to reduce the deficit below 3 percent of GDP by 2029 and place debt on a downward path.