Parliamentary division → Tightening, but nothing gets off the ground → Bonds get dumped → Financing costs skyrocket, and this self-reinforcing loop feels a bit suffocating

The Currency World News reports that the International Monetary Fund (IMF) has downgraded France's economic growth forecast for this year, expecting the country's GDP to grow by 0.7% in 2026, down from the previous month's forecast of 0.9%. The IMF stated that the short-term risks to this outlook are tilted to the downside, noting that new adverse factors stemming from the Middle East conflict are beginning to weigh on economic activity, with business investment and household consumption expected to slow down. Additionally, the IMF warned that France's efforts to reduce its budget deficit face risks, as successive governments have struggled to pass austerity measures in a divided parliament, leading to bond market sell-offs and rising financing costs. The IMF pointed out that upcoming elections could provide France with an opportunity to develop a credible fiscal consolidation strategy, but increased political uncertainty may delay related efforts in the short term.