Marc Touati argues that France’s macro deterioration is set to worsen into 2026, with growth slowing, inflation rising, unemployment increasing, and public deficits/debt deteriorating further. He frames the core problem as a persistent explosion in public spending that has far outpaced nominal GDP, and criticizes policymakers and credit-rating assessments as disconnected from the underlying fiscal trajectory.
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The speaker presents a bleak forecast for France in 2026. He says growth falls from 1.1% in 2024 to 0.9% in 2025 and only 0.4% in the best case for 2026. He expects inflation to reach 4% by year-end, unemployment to rise to 9% for category A and 21% for under-25s, public deficit to widen from a revised 5.2% to 6%, and public debt to reach 122% of GDP by end-2026. He argues that the French economy is being propped up by public spending and debt rather than real productive growth. He cites a long-run chart showing public spending rising 699.4% from 1980 to 2025, while nominal GDP rose 566.7% over the same period, calling the gap unacceptable. In his view, more than half of French citizens depend directly or indirectly on public spending, which makes reform politically difficult. …
Tactically bearish on French macro headlines: the immediate risk is another round of worse-than-expected inflation, labor, or fiscal prints that pressure sentiment and bond credibility.
Over the next few months, the base case is continued deterioration in growth and public finances unless the government delivers convincing spending restraint; otherwise the narrative likely stays negative and self-reinforcing.
Structurally, the speaker sees France as living beyond its means, with public spending growth chronically outrunning nominal output. The enduring regime risk is a sovereign model increasingly dependent on debt and politically resistant to reform.
France’s GDP growth is set to slow from 1.1% in 2024 to 0.9% in 2025 and 0.4% in 2026 in the best case.
Speaker gives explicit year-by-year forecast.
Inflation in France will reach 4% by the end of the year.
Direct forecast for year-end inflation.
France’s unemployment rate will rise to 9%, with youth unemployment increasing to 21%.
Speaker explicitly forecasts higher unemployment for overall and under-25 cohorts.
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