1. France – Growth slowing, pending a pick-up in domestic demand

2. A slight decline in economic activity in the first quarter, driven by factors unrelated to the conflict in the Middle East

3. Slightly lower growth and inflation: forecasts revised mainly for 2026

4. A downward revision to the energy price trajectory

5. Global demand outpacing domestic demand

6. 2026 is expected to be characterised by sluggish growth and a resurgence in inflation

7. In 2027, economic activity is expected to pick up slightly, whilst prices are expected to slow

8. A relatively cautious forecast, but in line with those of other forecasters

9. A notable impact of the situation in the Middle East on household and business confidence

10. The unemployment rate is expected to rise slightly further in 2026

11. Households are likely to be hit by the resurgence of inflation in 2026, whilst profit margins are expected to remain at a satisfactory level

12. Economic & Financial Forecasts
 

Economic activity contracted slightly in the first quarter, even though the effects of the war in the Middle East will not be felt until the second quarter.

Marianne PICARD

Uncertainty remains high despite the signing of the agreement between Iran and the United States, particularly regarding the pace at which traffic through the Strait of Hormuz will return to normal, and the easing of energy prices. France would therefore be less adversely affected by rising energy prices, which would support its competitiveness relative to other eurozone countries.

Marianne
 
PICARD
Economist

Economic activity is expected to grow only modestly in the coming quarters, with growth slowing to 0.6% in 2026 (down from 0.9% in 2025), hampered by sluggish private domestic demand against a backdrop of rising inflation and high uncertainty. Economic activity is set to pick up gradually in 2027, thanks to a rebound in household consumption and private investment, though this recovery would remain modest, with growth expected to reach just 0.8%. Inflation is expected to peak at an annual average of 1.8% in 2026, before falling to 1.5% in 2027, as measured by the Consumer Price Index. The unemployment rate is expected to rise slightly in 2026, before stabilising in 2027.