French Economic Confidence Drops as Borrowing Costs Rise
French business confidence declined in September 2026 amid rising interest rates and a worsening fiscal deficit that limits government economic support.
Economic confidence in France declined in September 2026, reversing growth trends observed over the summer. The overall business climate index fell to 96, dropping below the long-term average. This downturn was accompanied by weakening employment sentiment and exceptionally low consumer confidence.
The decline coincides with a sharp increase in long-term interest rates, which has raised borrowing costs for the state and exacerbated the national fiscal deficit. These financial pressures have limited the ability of the government to implement measures to support economic activity.
Analysis from Ingredient indicates that these factors will hinder national growth compared to other eurozone peers. GDP growth is now forecast to average 0.4% in 2026 and 0.9% in 2027, driven by a softening labor market and necessary fiscal consolidation.
