The Organisation for Economic Co-operation and Development has issued a stark appraisal of France's fiscal trajectory, saying public debt is likely to keep rising unless Paris implements more substantial spending cuts and restarts a postponed pension reform.
In its report on the euro zone's second-largest economy, the OECD described France's fiscal position as stretched. The agency projected the government deficit will remain about 5% of gross domestic product in 2026, while public debt is expected to continue its climb toward 119% of output.
To arrest that upward drift in debt, the OECD calculated that France will need a cumulative fiscal-tightening effort of three percentage points of GDP by 2030 - a scale of consolidation that exceeds the measures enacted so far. The recommendation underscores the gap between current policy and what the agency judges necessary to stabilise public finances over the coming years.
A central element of the OECD's prescription is the resumption of a pension change initiated in 2023 that would gradually raise the statutory retirement age from 62 to 64. That reform was suspended last year and deferred until after the April 2027 presidential election. The OECD urged the government to restart the overhaul as planned and to consider ultimately linking the retirement age to life expectancy - a proposal the report noted could be politically explosive in a country that has already experienced major strikes and street protests over pension reforms.
The warning arrived against a weakening economic backdrop. After growth of 0.9% in 2025, the OECD projects France's economy will expand by 0.7% in 2026 before edging up to 0.8% in 2027. The agency attributed the slowdown to continued political uncertainty, higher interest rates and external shocks.
Slower growth will complicate efforts to reduce the deficit, the OECD said, noting that elevated interest rates are increasing debt-servicing costs and constraining fiscal flexibility. Although exports and a resilient labour market have provided partial support to the economy, household consumption and private investment remain fragile.
The report also highlighted structural pressures on public finances such as rising pension and healthcare expenditures. Absent changes to those spending drivers, the OECD warned they will continue to weigh on the budget even as borrowing costs rise.
With an election scheduled for April 2027, the agency's findings place pressure on future governments to address public spending levels that the OECD judges are significantly higher than those of France's peers. The scale and timing of any measures remain political decisions, but the OECD's analysis sets out the fiscal arithmetic it believes is required to stabilise debt over the medium term.
Context and implications
- The OECD frames the policy challenge in quantitative terms - a three percentage point tightening by 2030 - while emphasising that current measures fall short.
- Restarting the 2023 pension reform and considering a link between retirement age and life expectancy are central recommendations; both are politically sensitive given recent public unrest.
- Growth projections show a clear deceleration from 2025 to 2026, which will make fiscal consolidation more difficult as borrowing costs rise.