France’s Fiscal Crossroads: Political Uncertainty Meets Manageable Debt Dynamics

Amundi’s Investment Institute examines France’s fiscal and market outlook as Prime Minister Bayrou faces a crucial confidence vote ahead of budget talks.

• Economic growth is set to improve modestly (0.7% in 2025, 0.8% in 2026), driven by stronger consumption and investment, but political uncertainty risks delaying business decisions.

• Public debt is projected to rise to 118–119% of GDP by 2026; however, longer debt maturities and historically low financing costs make the burden manageable.

• Market impact: OAT-Bund spreads widened (~80bps) on political risk, while French equities, cushioned by 80% international revenues, offer relative resilience.

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