French Budget Challenges: Navigating Towards a 4.8% Deficit

The Bank of France Governor, Francois Villeroy de Galhau, advocates for a 4.8% budget deficit in 2026. However, he remains skeptical about achieving this target as the French government faces significant political and financial challenges, following a narrow approval of the 2026 social security budget.

The Governor of the Bank of France, Francois Villeroy de Galhau, expressed support for a French budget deficit of 4.8% for the year 2026. Despite this, he doubted the French government's ability to achieve this target, citing political and financial hurdles.

His statements followed the marginal approval of the 2026 social security budget by French lawmakers. This legislative victory, though crucial for Prime Minister Sebastien Lecornu, comes at a significant cost and poses a threat to the government's stability.

Villeroy emphasized the importance of reducing France's debts, advocating for fiscal consolidation efforts to ensure the country's economic sustainability.

(With inputs from agencies.)