Key facts
- France's economy contracted 0.1% in the third quarter of 2026.
- Economy Minister Roland Lescure warned the country could 'hit the wall' without budget adjustments.
- The government aims to reduce the deficit to 5% of GDP in 2027 with €43 billion in savings.
- The 2026 deficit target of 5.4% of GDP may be complicated by the weak growth.
France's economy contracted by 0.1% in the third quarter of 2026, according to national statistics agency Insee, a slowdown attributed by Economy and Finance Minister Roland Lescure to extreme heat and rising energy prices. The weak performance complicates the government's pledge to bring the deficit down to 5.4% of GDP this year, as the target was based on an assumption of 0.5% growth. Lescure stressed the urgency of passing the proposed 2027 budget, which aims for a 5% deficit with €43 billion in savings, warning that failure to do so would lead the country to 'hit the wall.' The government may resort to a constitutional measure to pass the budget without a parliamentary vote, risking no-confidence motions.