The French central bank has lowered its economic growth forecast and expects inflation to accelerate.

The French central bank has lowered its economic growth forecast for 2026 and raised its inflation forecast, taking into account the impact of the surge in energy prices triggered by the Iran conflict. Prior to the release of this latest outlook, the European Central Bank had also made similar adjustments to its forecasts. The French central bank has also set unfavorable and extreme scenario assumptions. However, the French central bank's forecast shows that its inflation pressure is milder than that of the European Central Bank, with consumer price increases in France next year expected to be below 2% even in a severe scenario. As the second largest economy in the Eurozone, France's inflation levels have been consistently lower than the Eurozone average in recent months. Thanks to the widespread use of nuclear power, France's dependence on oil is also lower than in other Eurozone countries. In terms of economic growth, the French central bank's unfavorable scenario suggests that economic growth will be more severely hampered this year but will align with the baseline forecast from 2027 onwards; the severe scenario indicates a larger decline in economic growth rates in the next two years.