France’s government is sticking to its goal of bringing the deficit below 3% of GDP by 2029, even as it trims growth forecasts for the next three years. The Finance Ministry presented its multi-year deficit-reduction plan to the European Commission on Wednesday, reaffirming the target to narrow the deficit from 5% this year.

Economic growth is now expected at just 1% in 2027, down 0.2 percentage points from earlier projections, with GDP seen expanding 1.2% in the following two years. The ministry omitted deficit targets for 2027 and 2028 from the plan. Inflation will be stronger than previously expected at 1.9% in 2026 due to Middle East conflict fallout, slowing to 1.6% in 2027.

France’s volatile politics are complicating efforts to repair public finances already strained by the Covid pandemic and 2022 energy crisis. Lawmakers have repeatedly toppled governments since Macron’s snap elections fractured parliament in 2024, while bond market selloffs have driven up borrowing costs. Moody’s Ratings warned this month it sees “significant risks” France will fail to agree on further budget repair measures in 2027 and beyond.