Bank of France Governor Confirms French Economic Growth Through 2028 Amid Uncertainties

François Villeroy de Galhau, governor of the Bank of France, has reiterated that France is expected to maintain positive economic growth through 2028 despite external uncertainties, particularly stemming from the ongoing conflict in the Middle East. Speaking in his annual letter to President Emmanuel Macron and in recent interviews, Villeroy de Galhau highlighted that all published scenarios forecast continued GDP growth, ranging between 0.3% and 0.9% for 2026.

According to data from the French national statistics agency Insee, the French economy experienced an unexpected stagnation in the first quarter of 2026, with GDP remaining steady rather than increasing by the anticipated 0.3%. This slowdown was largely attributed to disappointing export figures. Subsequently, the French government revised its 2026 growth forecast downward to 0.9%, aligning closely with projections from both the Bank of France and the International Monetary Fund (IMF).

Inflation in France is expected to peak in 2026, having risen from 1.1% in February to 2.5% in April, before declining below the 2% threshold thereafter. Villeroy de Galhau cautioned about the unpredictable impact of geopolitical tensions on the economy and urged preparedness for varying economic scenarios.

Regarding fiscal policy, the governor emphasized the importance of avoiding broad, generalized fiscal support measures, especially in response to rising fuel prices, due to constraints on public finances. He warned that missing the budget deficit target of 5% of GDP by 2026 could increase borrowing costs for France. Instead, targeted and temporary measures have been implemented, focusing support on specific sectors and low-income households, as announced by Prime Minister Sébastien Lecornu, who ruled out reducing fuel taxes for now.

Looking to the longer term, Villeroy de Galhau expressed optimism that France could enhance its potential growth rate from around 1% to 1.5% within the next decade, which would positively impact employment and purchasing power. He also highlighted the strength of private finances in France and called for unity beyond internal political disputes to achieve this goal.