France unemployment to hit seven-year high in 2026

[PARIS] French unemployment is forecast to reach its highest level since 2019, raising fresh concerns over the fragility of the euro area’s second largest economy.

The jobless rate is expected to reach 8.2 per cent in this year, according to the median estimate of 16 economists surveyed by Blooomberg News from July 3 to 8.

France’s economy had already shown signs of fragility before the Iran war. Unemployment jumped to a five-year high in the first quarter, while gross domestic product recorded its first quarterly contraction since the Covid pandemic.

“We expect the job market to stop cooling in the coming quarters because we expect the French economy to gradually pick up and even to rebound later in 2027,” said Jean Dalbard of Bloomberg Economics. Low growth, as well as domestic and global instability, have been holding back companies’ hiring intentions, he said.

The ongoing war and budget delays led the government to cut its GDP forecast for 2026 to 0.7 per cent. Finance Minister Roland Lescure announced 3 billion euros (US$3.4 billion) of additional cuts to deliver on the promise of shrinking the 2026 deficit to 5 per cent of gross domestic product. BLOOMBERG