The International Monetary Fund concluded an annual staff visit to France and issued a cautionary assessment of the country’s fiscal outlook. According to the IMF, progress in cutting the public budget deficit has faltered relative to plans, leaving the public finances more exposed to market developments and potential shocks.
The IMF noted that the public budget deficit narrowed to 5.1% of GDP in 2025. However, it said measures to bring the deficit down further are moving more slowly than envisaged and carry "significant implementation risks." The fund warned that, under current policies, the government is unlikely to achieve its stated objective of reducing the deficit below 3% of GDP by 2029.
Highlighting the political calendar, the IMF suggested that the presidential election next year provides an opportunity for a more credible fiscal reset. The fund said that without additional corrective actions, public debt would remain elevated and the country would risk having to implement more severe fiscal adjustments at a later date.
The IMF also pointed to structural pressures on spending. It said rising demands linked to an ageing population, increased defence needs and costs associated with the energy transition are adding to already-high public outlays, which reached 57.5% of GDP last year. These dynamics were cited as factors that compound the challenge of bringing deficits and debt down.
On growth, the IMF described the expansion as modest. It expects the economy to grow by 0.7% in 2026 following a 0.9% expansion in 2025. The fund said that geopolitical tensions and domestic political uncertainty ahead of the 2027 election weighed on the outlook.
To reduce risks, the IMF recommended a credible, multi-year strategy that blends spending restraint with structural reforms. The fund identified specific reform priorities: adjustments to the pension system, tighter unemployment benefits, and measures to improve the efficiency of health and education spending. The IMF noted that pension reform is likely to become a central issue in the 2027 election, after the government suspended a 2023 increase in the retirement age last year as a concession to secure budget approval.
Contextual summary
The IMF’s findings underline a fiscal trajectory in which recent improvements have not yet translated into a durable path toward the government’s deficit target. The combination of high public spending, demographic and policy-driven pressures, and slower-than-planned consolidation lead the fund to press for policy changes to reduce vulnerability to market pressure and future shocks.