PARIS, April 14 (Reuters) - France's Finance Ministry trimmed its 2026 growth forecast slightly on Tuesday and hiked its inflation estimate to reflect the current conflict in the Middle East. The euro
French finance ministry trims growth outlook, hikes inflation estimate
France Revises Economic Forecasts Amid Global Uncertainty
Growth and Inflation Projections
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.
Factors Influencing the Outlook
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.
Energy Prices and Assumptions
The ministry said its projections assume oil prices will remain at $100 a barrel until the end of May before gradually easing.
Fiscal Policy and Government Response
Deficit Reduction Commitment
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.
Impact of Rising Borrowing Costs
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)
