PARIS, June 17 (Xinhua) -- The Bank of France has cut its forecast for the country's gross domestic product (GDP) growth in 2026 to 0.5 percent, down 0.4 percentage point from its March projection.
The central bank said late on Tuesday that the downgrade reflected a sharper rise in oil prices than what was assumed in its March baseline scenario. Weaker-than-expected economic resilience in the first quarter and relatively subdued activity in the second quarter also contributed to the adjustment.
For the next two years, growth is expected to rebound to 0.9 percent in 2027 and 1.2 percent in 2028, supported by a recovery in private domestic demand, particularly household consumption and business investment.
The Bank expected headline inflation to reach 2.5 percent in 2026, driven by higher oil prices, a 0.8 percentage point upward revision from its March forecast. Inflation is then estimated to ease to 1.7 percent in both 2027 and 2028 as energy prices soften.
In an interview with French daily newspaper Les Echos, Emmanuel Moulin, the new governor of the Bank of France, said the public deficit would expand slightly in 2026 to 5.2 percent of GDP in the absence of additional savings measures. The public debt ratio would continue to rise, reaching 122 percent of GDP in 2028 and increasing the gap with the eurozone average.
Moulin also mentioned the government's support measures to help limit the impact of rising fuel costs on public finances. Under these conditions, the target of bringing the public deficit down to 5 percent of GDP remains within reach, he said. ■