French Public Debt Hits 117% of GDP as Interest Rates Reach Highest Since 2008

France's public debt climbed to 117% of GDP in July 2026, a level unseen since the 2008 financial crisis, as borrowing costs surged amid global economic pressures. On August 18, the yield on ten-year French government bonds rose to 4.10%, nearing the 4.20% peak recorded during the 2008 crisis. This increase reflects rising inflation concerns, especially due to the ongoing Middle East conflict, which has kept oil prices elevated and added to economic uncertainty.

Roland Lescure, France's Minister of Economy, noted the difficulties in preparing the 2027 budget under these conditions, citing the challenges posed by higher interest rates and an approaching electoral campaign. The surge in yields is part of a broader trend affecting major economies, with the Eurozone's benchmark ten-year German bond yield also reaching 3.26%, its highest since 2011. This scenario highlights growing investor anxiety over the long-term fiscal stability of European states amid inflation risks.

The rising interest rates in France mirror disturbances felt globally, as large economies grapple with the implications of more expensive debt servicing. The heightened borrowing costs complicate public finance management and put pressure on government budgets at a crucial time.

Overall, the situation underscores the delicate balance France must maintain between managing its elevated public debt and navigating an uncertain international economic environment.