The Bank of France now projects the country’s GDP to grow by just 0.6% this year, down from the 0.7% forecast made three months ago, following a 1.1% expansion in the previous year.

The central bank projected that US tariff threats and the resulting economic uncertainty would reduce France's GDP by a total of 0.4 percentage points through 2027, with about half of that impact already included in earlier forecasts.

According to the Bank of France, the primary drag on growth stems not from the tariffs themselves, but from the broader uncertainty they create. The bank noted that its estimates assume tariffs will stay at the 10% level proposed by the Trump administration, Reuters reports.

“This unpredictability amplifies the French and European challenge of sluggish growth, which has existed for too long,” Bank of France Governor Francois Villeroy de Galhau commented during an interview with Les Echos newspaper.

According to the central bank, its monthly business climate survey indicates that the French economy will grow by just 0.1% in the second quarter, matching the pace of the first quarter.

Looking further ahead, growth is projected to pick up to 1.0% in 2026 and 1.2% in 2027, though these figures have been revised downward from the March estimates of 1.2% and 1.3%, respectively.

This year, economic activity is expected to be driven by domestic demand and efforts by businesses to replenish depleted inventories, while foreign trade is anticipated to have a negative impact on growth.

Whereas the projected recovery in 2026 and 2027 is expected to be fuelled by real wage increases that will strengthen consumer demand, while lower interest rates are likely to support private investment, particularly in housing.

Inflation forecasts have also been revised downward, with EU-harmonised consumer price inflation now expected to average just 1.0%, compared to the previous estimate of 1.3%, due to declining electricity and oil prices.

Indeed, inflation is now forecast to reach 1.4% in 2026 and 1.8% in 2027, slightly lower than the previous forecasts of 1.6% and 1.9%, respectively.