France's finance ministry expects public debt to hit a record 119.3% of GDP in 2026, rising further to 121.7% in 2027. The projection comes as the government also forecasts a 5.4% budget deficit and the premium on French borrowing over Germany widens to levels last seen during the euro zone debt crisis.
France's debt is expected to reach a record high of 119.3% of output in 2026, with the finance ministry projecting a debt-to-GDP ratio of 121.7% in 2027. The finance ministry made the forecast in a declaration to the High Council of Public Finances, the body that evaluates revenue and expenditure forecasts in the government's budget proposal.
France's debt-to-GDP ratio stood at 115.7% in 2025, and it was below 100% as recently as 2019. The ministry also said it expects to end the year with a budget deficit of 5.4%. Prime Minister Sebastien Lecornu said Thursday he expected the 2026 deficit to come in well below 5.5%.
Lecornu has announced plans to include a €54 billion savings drive in his 2027 budget to stop the deficit spiraling out of control. But he faces a tough task pushing austerity measures through a deeply divided parliament, amid mounting pressure from voters over the cost of living.
The premium France pays to borrow compared with Germany rose to more than a whole percentage point on Friday for the first time since the euro zone debt crisis. The move underscores investor unease with France's stretched finances ahead of elections next year.
Source: Investing.com
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