“Business investment and household consumption are set to moderate in response to the shock, amid a persistent wait-and-see attitude ahead of the 2027 elections,” the IMF said in its latest review of the country.

Its forecast is below the government’s own forecast for growth of 0.9 percent this year, the same level reached in 2025.

Officials are currently weighing new financial help for households and businesses struggling with fuel price increases from the Middle East war, even as the government seeks to cut billions of euros in spending to cut the deficit.

The country is also gearing up for 2027 presidential elections where centrist Emmanuel Macron, in office since 2017, is not eligible to run, leaving a wide-open field where polls suggest the far right could make gains.

“Heightened political uncertainty ahead of next year’s presidential elections could further delay planned fiscal consolidation and structural reforms,” the IMF said.

France is under pressure to reduce a budget deficit that stood at 5.1 percent of GDP last year — well above the three-percent limit set for members of the eurozone.

Prime Minister Sebastien Lecornu has pledged to bring it down to around five percent as part of the 2026 state budget passed earlier this year.

But the Mideast war has sent energy prices soaring worldwide, raising fears the government will have to make painful choices to keep its finance goals on track.

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