France's Economic Outlook Clouds Amid Political Turmoil

France's economy is anticipated to grow slower than expected due to domestic political unrest and global issues. The Bank of France reduced its growth forecast, citing political uncertainty affecting spending and investment. Despite efforts to improve public finances, political fragmentation complicates meaningful financial progress.

The Bank of France has downgraded its economic forecast for the coming years, attributing the slowed growth to internal political turbulence compounding global challenges.

According to their recent predictions, France's economic growth, initially expected at 1.2% for 2025, has been adjusted to 0.9%, reflecting the impact of political strife on consumer confidence and private investment. Emmanuel Macron's administration faces heightened budget scrutiny following political upheavals that saw a fourth prime minister named this year.

Compounding the economic woes is Moody's decision to lower France's credit rating due to persistent political fragmentation and the challenges in improving public finances. The debt projection now stands at 117% of GDP by 2027, with inflation expected to remain below the European Central Bank's target, further complicating the fiscal landscape.

(With inputs from agencies.)