PARIS, April 14 (Reuters) – France’s Finance Ministry trimmed its 2026 growth forecast slightly on Tuesday and hiked its inflation estimate to reflect the fallout from the conflict in the Middle East.
The euro zone’s second biggest economy is now expected to grow 0.9% this year instead of the 1.0% expected previously while inflation is projected to average 1.9% instead of 1.3%, mainly due to higher energy import prices, the ministry said.
Finance Minister Roland Lescure said the current crisis would have a “modest impact” on growth, citing momentum carried over from last year, while inflationary effects would be “limited” thanks to France’s heavy reliance on nuclear power.
The ministry said its projections assume oil prices will remain at $100 a barrel until the end of May before gradually easing.
Despite a less favourable economic outlook, the government reiterated its commitment to cutting the public sector budget deficit to 3% of output by 2029, from 5.1% in 2025.
However, a surge in global bond yields since the conflict erupted has increased borrowing costs, adding an estimated 4 billion euros to government financing expenses this year, the ministry said.
(Reporting by Leigh Thomas, Editing by William Maclean)
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