The Bank of France lowered its 2026 growth forecast for France to 0.4% from 0.5% in June after activity stalled during the first half of the year. Consumer and business caution, higher financing costs, uncertainty over energy prices, public finances and geopolitical tensions are weighing on domestic demand, although exports continue to benefit from resilient global trade. The government cut its 2026 forecast to 0.5% from 0.7% in preparation for its 2027 budget, while INSEE (France's national statistics office) lowered its estimate to 0.4% from 0.7%. The central bank expects growth to accelerate to 0.9% in 2027 and 1.2% in 2028 as household purchasing power recovers and energy pressures ease. It warned that the outlook remains tilted to the downside, with the Middle East conflict posing the biggest uncertainty through its effect on oil and gas prices. Inflation is forecast at 2.3% in 2026, 1.9% in 2027 and 1.6% in 2028, while unemployment is projected to reach 8.4% by year-end, average 8.3% next year and fall to 8.0% in 2028. A monthly survey of 8,500 executives indicated that the economy would grow 0.1% in the third quarter after flat growth in the previous three months.