France Debt to Hit Record 119.3% of GDP in 2026, Deficit at 5.4%

France's public debt is forecast to reach 119.3% of GDP in 2026 and 121.7% by 2027, the highest level since records began in 1978, finance ministry officials said. The ratio exceeds double the EU's 60% limit as the budget deficit widens to 5.4% of GDP from 5.1% in 2025. The 10-year bond yield climbed to 4.45% on Friday, its highest since the global financial crisis, while the 30-year yield touched 5.11%, the highest since 2002. Economy Minister Roland Lescure said debt servicing costs will rise 25% this year to €65 billion. Prime Minister Sébastien Lecornu said the government plans €54 billion in 2027 budget cuts. France's economy contracted 0.2% in the first quarter and flatlined in the second. ING economist Charlotte de Montpellier noted the implicit interest rate on public debt rose from 1.25% in 2020 to around 2% in 2025, leaving France increasingly exposed to higher refinancing costs.