France Carries Debt of 119% of GDP, Faces 122% Projection and IMF Growth Forecast of 0.4%

Since French school blockades turned into wider unrest and pockets of youth violence, the focus has shifted from the streets to the balance sheet. The balance sheet is not pretty.

France's public debt stood at nearly €3.6 trillion (about $4.08 trillion) at the end of June, equal to 119% of GDP, according to France's national statistics agency. The government said about three weeks ago that the budget would again breach EU spending limits and that debt is expected to reach nearly 122% of GDP, a record.

Growth is the weak link

The International Monetary Fund forecasts French growth of 0.4% this year, the lowest among developed countries. Global growth is forecast at 3.1% and advanced economies at 2.1%.

France's number is roughly one-third of Germany's and half of Italy's. Only Japan, at 0.7%, comes close to the bottom.

The annual deficit is 5.4% of GDP, according to figures cited by CNN. Public debt is about double the EU's target level.

The size of the state

Eurostat's 2025 figures put French government spending at 57.2% of economic output. The EU average is just under 50%.

On the revenue side, taxes and social contributions equaled 45.2% of GDP in 2024, a close second behind Denmark. The EU average was just over 40%.

So France taxes near the top of Europe, spends well above its peers, and still runs a deficit above 5% with growth under 1%. Spending on business subsidies, health care and pensions leaves little room to maneuver.

Gilbert Cette, an economics professor at Neoma Business School in Paris, called the debt "enormous" and said it constrains "France's entire economic policy." Cette said France has increased spending while lowering taxes in recent years. Policymakers now have to cut spending or raise taxes that are already among Europe's highest.

Borrowing costs

The French 10-year yield was 4.96% on Tuesday, Oct. 20, against about 3.4% for the German Bund. By early trading Thursday, Oct. 22, it had risen to 5.089%, lifting it above the U.S. Treasury equivalent for the first time since 2013.

Higher yields mean more of each tax euro goes to interest. That leaves less for pensions, education, health, defense and social programs.

The Economy Ministry has acknowledged that it has cut sales of bonds with maturities beyond 30 years because investor demand is lower, BBC reported.

IMF data shows the pressure is not France's alone. Since February, the average 10-year yield across the G7 economies has risen by more than 1 percentage point to its highest level in nearly 20 years. CNN tied part of the increase to the Iran war. The fund projects that G7 public debt will collectively exceed economic output by the end of the decade, a first since World War II.

What the government says

Finance Minister Roland Lescure told the National Assembly that France is not caught in a debt "snowball."

Carsten Brzeski, global head of macro at ING, also rejects the Greece comparison. "France is not Greece," he said. He added that false promises and an inability or unwillingness to start fiscal and structural reforms are eroding France's credibility.

CNN's analysis argued that contagion risk across Europe is low and that the United States faces no imminent danger of becoming the next France. Peter Taylor-Gooby, a social policy professor at the University of Kent, put the risk differently. "In Europe, people are increasingly scared of the bond market," he said, and "if we do [ignore it], we'll reach a serious crisis."

The budget fight

Prime Minister Sébastien Lecornu's government intends to push through a 2027 budget with €54 billion in cuts. Alexandra Roulet, president of the Circle of Economists of France and a professor at INSEAD, called that a historic figure and "well above what some economists were even proposing."

Roulet said the government has "little room to maneuver." On the cost of living, she said, Lecornu's government has its "hands tied behind its back." Students are demanding more money for schools, which she described as an easier ask to meet.

The school complaints that started the protests are specific: leaks, cockroaches, cracking walls and cold classrooms, according to El País. Those complaints sit next to a state that spends more of its economy than almost any in Europe.

President Emmanuel Macron is nearing the end of a nearly decade-long tenure, and the debt rose substantially during it. The state of the public finances is expected to be a central issue in the race to succeed him next spring.

Whether a divided parliament can pass a budget with €54 billion in cuts while the streets are unsettled remains open. France's 10-year yield sits above 5%, and no 2027 budget has been enacted.