In 2026, the government once again failed to stabilise its public debt-to-GDP ratio due to a significant fiscal deficit and lower-than-usual growth. According to our analysis, this underperformance is due to exceptional factors. Structurally, France can still generate growth that will help the public debt ratio to stabilise, provided that its budget deficit is brought down to approximately 3% of GDP. To achieve this, it has significant strengths:
1. Improved competitiveness in terms of labour and energy costs;
2. Its services sector, notably through the development and use of new technologies (including AI);
3. An industrial recovery driven by aeronautics, military spending and electrification, which calls for increased investment;
4….