France's Economic Forecast Takes a Hit: Calls for Deficit Action

Emmanuel Moulin, France's central bank chief, urges government action to curb public deficit following a downward revision of economic growth forecasts to 0.4%. Issues such as a heatwave and Airbus problems contribute to the revised outlook. The government will soon adjust its forecast and prepare its 2027 budget bill.

Emmanuel Moulin, the governor of France's central bank, has emphasized the need for government intervention to address the country's public deficit, claiming that France is not facing a catastrophic economic scenario. His remarks came as the French national statistics institute, INSEE, reduced its economic growth projection for the eurozone's second-largest economy to 0.4% for the current year from the previous estimate of 0.7%.

This adjustment follows adverse factors including a severe heatwave and disruptions affecting Airbus. Despite a prior expansion rate of 0.9% last year, the ongoing challenges have necessitated revisions in economic expectations.

The French government is anticipated to revise its own forecast downward from 0.7%, in preparation for submitting its 2027 budget bill to the parliament by the month's end, reflecting ongoing concerns over economic stability.