Banque de France Forecasts Economic Growth for 2025 and 2026, Urges Fiscal Discipline

Economic Outlook for France

Francois Villeroy de Galhau, Governor of the Banque de France, announced on Wednesday, November 12, 2025, that France's economy is projected to grow by at least 0.7% in 2025 and at least 0.9% in 2026. The Governor indicated that these forecasts might soon be revised upward, with the bank's precise figures expected to be released on December 19. This announcement follows a stronger-than-expected performance of +0.5% in the third quarter of the current year, contributing to what Villeroy de Galhau described as the French economy's 'good degree of resilience'.

Call for Tighter Public Spending Control

Alongside the growth projections, Governor Villeroy de Galhau issued a strong call for tighter control over public spending. He highlighted the 'major debate on public deficit in France' and warned that the current direction of parliamentary discussions was 'not on the right track'. The Governor stressed the imperative to reduce the national deficit to 3% of GDP by 2029. To achieve this, he stated that the deficit should not exceed 4.8% in 2026, representing a quarter of the necessary progress from the current 5.4% starting point. Failure to implement such measures, he cautioned, risks a 'gradual collapse' of public finances.

Addressing France's Public Debt Challenge

The urgency for fiscal discipline is underscored by France's escalating public debt. Over the past four decades, the country's public debt has surged from 30% to 110% of GDP. Interest payments on this debt now surpass the defense budget and are anticipated to soon exceed the education budget. Projections indicate that the public debt could reach 118.4% of GDP by 2026, up from 113% in 2023. The 2026 budget draft itself accounts for an increase in public debt to 118% of GDP, equivalent to 3.5 trillion euros. Villeroy de Galhau has consistently advocated for an end to the 'whatever it takes' spending policy, noting that France's yearly deficit is expected to be among the highest in the European Union.

Broader Economic Context and Previous Forecasts

The Banque de France's current outlook reflects an evolving economic landscape. In September 2025, the bank had projected 0.7% growth for 2025 and 0.9% for 2026, with a further increase to 1.1% in 2027. Earlier in June 2025, the forecast for 2025 had been revised downwards to an annual average of 0.6%. The Governor's recent statements suggest a more optimistic trajectory than some previous assessments, yet they remain firmly coupled with a strong emphasis on the need for rigorous fiscal management to ensure long-term economic stability.