France's economic growth forecast cut to 0.4 pct in 2026: Insee

PARIS, Sept. 10 (Xinhua) -- France's economic growth forecast for 2026 has been lowered to 0.4 percent from the previously projected 0.7 percent, according to the latest economic outlook report released on Thursday by the French National Institute of Statistics and Economic Studies (Insee).

Photo taken on Aug. 28, 2026 shows bottles of wine at a supermarket in Paris, France. (Photo: Xinhua)

Compared with the performance of its neighboring countries, France's economy is lagging behind, mainly due to a sharp downturn in public works activities linked to the municipal election cycle, the impact of heatwaves, a weaker labor market and less favorable fiscal stimulus measures, Insee said.

French inflation stood at 2.4 percent in August and is projected to reach 2.9 percent by the end of the year, Insee said, noting that the surge in energy prices is expected to gradually spill over into manufactured goods and services, particularly transport.

INSEE said that France's unemployment is expected to reach 8.6 percent by late 2026, adding that household purchasing power would slip by 0.4 precent over the year driven by the dual impact of falling salaried employment and stagnant real wages.

According to currently available data, France appears to have been more severely affected by heatwaves than its neighboring countries, particularly in agriculture, which is estimated to shave 0.1 percentage point off economic growth over the year, the institute said.