The High Council of Public Finance doubts the 2027 budget scenario

The High Council of Public Finances considers the economic and budgetary scenario of the finance and social security financing bills for 2027 to be plausible but fragile. Its opinion no. HCFP-2026-5 of September 25, 2026, issued following a referral from the Government on September 18, is published in the Official Journal of October 2, 2026, under NOR HCFX2625812V. The High Council believes that the 1.0% growth assumed for 2027 appears “optimistic” and that the return of the deficit to below 3% of GDP by 2029 is “unlikely.”

The High Council of Public Finances is a collegiate institution of eleven members, chaired by the First President of the Court of Auditors and comprising four magistrates from the Court of Auditors, four qualified individuals appointed by the National Assembly and the Senate, one individual appointed by the Economic, Social and Environmental Council, and the Director General of INSEE. For this opinion, it heard from the Directorate General of the Treasury, the Budget Directorate, the Social Security Directorate, INSEE, the Bank of France, OFCE, and Rexecode. Given the functions performed by its president as Minister for Action and Public Accounts until February 22, 2026, she recused herself from the deliberation on the year 2026, which was chaired by Ms. Carine Camby, following the opinion of the ethics officer Mr. Christian Vigouroux.

The opinion is issued in a context marked by the continuation of the conflict in the Middle East, a general rise in interest rates, and uncertainty regarding the adoption of the budget itself. The Government’s scenario assumes a Brent barrel at $80 in 2027 after $88 in 2026, while spot prices have been higher since late August. The French 10-year rate exceeded 4.0% in August 2026, a first since October 2008, and reached 4.7% on September 24, 2026.

2026: growth reduced to 0.5% and deficit at 5.4% of GDP

For 2026, the Government is now projecting:

• growth of 0.5%, compared to 1.0% in the initial finance law and 0.9% in the annual progress report from April;
• a public deficit of 5.4% of GDP, compared to 5.0% in the IFL and the APR;
• a public debt ratio of 119.3% of GDP;
• interest charges of €79.2 billion, or €4.5 billion more than expected in the 2026 IFL.

The High Council considers this update plausible, while noting significant uncertainties in expenditures and revenues. It notes that the management measures taken during the year are not sufficient to contain spending within the planned limits, contrary to the principle of full compensation for additional costs put forward until now. The increase in net expenditure would reach €22.6 billion, or +1.4%, above the 1.2% ceiling recommended by the Council of the European Union.

2027: a growth scenario deemed optimistic

The Government maintains a growth assumption of 1.0% for 2027, a deficit at 5.0% of GDP, and debt at 121.7% of GDP. Forecasts from the heard bodies range between 0.7% (OFCE and Rexecode) and 0.9% (Banque de France), with the forecasters’ consensus as of September 17 standing at 0.8%. The High Council considers the rebound in private investment to be “ambitious” and that downside risks are predominant. The inflation forecast, at +1.8%, is deemed consensual.

The projected structural effort would reach 0.9 percentage points of GDP, or approximately €28 billion, consisting of €17 billion in revenue and €11 billion in spending. The primary spending effort would rise to €23 billion, as interest payments absorb a significant portion of the savings achieved elsewhere.

Savings conditional on the adoption of texts

To make the trajectory credible, the Government is relying notably on:

• the freeze of the index point in the civil service;
• a freeze on basic retirement pensions, except for the lowest;
• measures curbing family and solidarity benefits;
• savings on sick leave and the prices of health products;
• a contribution from local authorities.

The main spending increases would be interest payments (+ €12 billion), retirement benefits (+ €9 billion in the social sector), defense (+ €6.5 billion), and health (+ €5.5 billion). The High Council considers the spending forecast achievable if all these measures are applied, but reminds that their implementation depends on the adoption of financial laws and regulatory provisions. Otherwise, the planned balance could only be maintained by replacing the measures with others of equivalent yield.

A deficit that is almost entirely structural

At 5% of GDP, the 2027 deficit would remain close to that of 2025 and higher than that of 2022, and it is almost entirely structural in nature. The structural balance would reach −4.8 percentage points of potential GDP in 2026 and then −4.2 points in 2027, far from the targets of the 2023-2027 public finance programming law, set at −2.9 and then −2.7 points. The correction mechanism, triggered by the High Council in April 2025 and kept active in April 2026, therefore remains relevant. The High Council considers it “unlikely” that the deficit will return to below 3% by 2029, unless there are particularly favorable cyclical developments.

For taxpayers and administrations, the announced savings — pension freezes, freezing of the index point, slowing of benefits — remain subject to parliamentary decisions that are still uncertain, while the debt burden and rising interest rates weigh on the trajectory. The High Council calls for strict adherence to the net expenditure trajectory to which France has committed and for the necessary additional measures to be taken to regain control of the debt. The opinion will be attached to the 2027 finance bill and the social security financing bill upon their submission to the National Assembly.

Source : Official Journal of the French Republic, JORF No. 0230 of October 2, 2026, Opinion No. HCFP-2026-5 of September 25, 2026, NOR: HCFX2625812V.