The French government's budget blueprint for 2027 is already under fire, with the country's fiscal watchdog casting doubt on the growth assumptions underpinning the plan. In an opinion released on Thursday, the High Council for Public Finance (HCFP) described the 1.0% growth forecast as "optimistic", citing "significant uncertainty" over the domestic outlook, including the very adoption of the budget.
The HCFP, chaired by Amélie de Montchalin – a former minister under Emmanuel Macron and now First President of the Court of Audit – also flagged the fragility of the executive's fiscal trajectory. The government aims to narrow the public deficit to 5.0% of GDP in 2027, down from 5.4% this year, through an "effort" worth €54 billion.
That would mark the fifth consecutive year with a deficit at or above 5%, noted Hadrien Camatte, senior economist for France, Belgium and the eurozone at Natixis CIB, in a commentary to Euronews. "There is a risk of budget slippage," he warned.
Fiscal measures and their limits
The plan includes €43 billion in new measures – €25 billion in spending cuts and €18 billion in additional revenue – on top of €12 billion already decided this year. The central government deficit would widen to 5.0% of GDP in 2027 from 4.8% in 2026, driven mainly by higher debt-servicing costs (+€10.3 billion), defence spending (+€6.5 billion), and France's contribution to the EU budget (+€2.8 billion).
Most of the adjustment would fall on the social security system, with a target surplus of 0.2% of GDP, compared with a deficit of 0.1% in 2026. This would involve a partial freeze on pensions (savings of around €4 billion) and on family benefits (€500 million). Local authorities would see their deficit narrow slightly to 0.1% of GDP.
On the revenue side, the government plans €17.2 billion in new compulsory levies, including an overhaul of social contribution cuts (€6.6 billion), higher local taxes, and trimming a tax allowance for retirees.
But these projections rest on assumptions that Camatte calls "optimistic". The government expects GDP growth of 1% in 2027, while Natixis forecasts 0.8%. It also assumes an average 10-year government bond yield of 4.3% – a level already exceeded in recent days, with yields touching 4.9%. "Weaker economic growth, the high sensitivity of debt-servicing costs to interest rates – a 100 basis-point increase would mean an additional €3.4 billion in 2027 – and the insufficiently documented nature of certain measures all create a risk of budget slippage," he said.
Political and geopolitical clouds
François Facchini, professor of economics at the University of Paris 1 Panthéon-Sorbonne, says it is "very difficult" to predict 2027 growth. He points to the war in the Middle East, which is pushing up fuel prices in France, and to domestic political instability. The new government that takes office after the 2027 presidential election "will probably pass an amending finance bill that will affect growth", he believes.
Facchini also expects the election year to bring strikes and social movements, as various groups seek to influence candidates' promises. He mentions civil servants and students, but also "tomorrow the overseas territories, universities, the health sector, all the sectors that are highly dependent on political choices". He adds that food prices are likely to rise after the heatwaves and drought of 2026.
Given the geopolitical and political uncertainty, likely inflationary pressures, and the risk of a debt crisis, Facchini concludes: "The High Council is right: 1% [growth] is optimistic." He qualifies that by noting it is "generally the rule for budget scenarios".
A parliamentary wall
Before any of this can take effect, the current government must get the budget through a National Assembly that is increasingly fragmented as the presidential election approaches. Hadrien Camatte sees two possible routes for Prime Minister Sébastien Lecornu: invoking article 49.3, which allows adoption without a vote but automatically triggers no-confidence motions, or using ordinances.
The first option would require reducing the planned savings effort and would need either the abstention of the Socialist Party – "an unlikely prospect in light of its recent statements" – or of the National Rally, whose positions are more open but with red lines that could shift, particularly on pensions. As for ordinances, they would give France a budget "matching the version adopted by the government" if parliament fails to agree within 70 days of debate.
France would then be entering uncharted territory under the Fifth Republic. The stakes are high, and the coming months will test the government's ability to navigate a deeply divided parliament while keeping the country's finances on a credible path. As European bond markets have shown, investors are watching closely, and France's borrowing costs have already hit multi-decade highs. The government's austerity push may be necessary, but its success is far from assured.
