France expects public debt to reach a record 119.3% of GDP in 2026 and climb further to 121.7% in 2027, according to new projections submitted by the Finance Ministry to the High Council of Public Finances. The government expects the 2026 budget deficit to finish at 5.4% of GDP.
The figures mark a further deterioration from a debt ratio of 115.7% in 2025 and come as France faces increasingly expensive borrowing conditions.
The premium investors demand to hold French 10-year government debt rather than comparable German bonds moved above one percentage point Friday, a level not seen since the euro-area debt crisis.
The government has outlined roughly €54 billion of savings for its 2027 budget as it attempts to reduce the deficit, while higher interest costs are consuming an increasing share of public resources.
The new debt numbers matter because France is one of the euro area’s largest sovereign borrowers. Continued increases in its financing costs could affect European bond markets more broadly and complicate fiscal consolidation.
Investors will now be watching the upcoming budget process, France’s borrowing costs and whether the government can stabilize the debt trajectory without further weakening economic growth.
