Business · Economy · 1 day ago
France’s debt risks could have global effects, economist warns
France’s public debt has risen to 119% of its economy, while its budget deficit remains about 5% of GDP.
Desmond Lachman, a former deputy director of the International Monetary Fund, warns that this could lead to a French debt crisis with effects beyond the country.
France is the European Union’s second-largest economy, and its debt is several times larger than Greece’s before the 2010 debt crisis.
The warning comes as government bond yields have also risen in the United States, Japan and the United Kingdom.
France’s 10-year government bond yield reached 4.83% on October 9, making it more costly for the government to borrow.
Official forecasts say French economic growth will remain below 1% in 2027, limiting the help growth could provide in reducing debt.
Political divisions and repeated changes to budget plans have prevented significant deficit cuts, and the National Assembly has struggled to agree on how to make the debt sustainable.
No next steps are specified.
Desmond Lachman, a former deputy director of the International Monetary Fund, warns that a French sovereign debt crisis could have global repercussions.
France's public debt has risen from just over 80% of gross domestic product in 2010 to 119% today, according to the article.
Budget deficits of 5% of GDP continue to add to the debt burden.
The yield on French 10-year government bonds reached 4.83% on October 9.
Official forecasts cited in the article put French economic growth below 1% in 2027, limiting the scope to reduce debt through growth.
Lachman argues that repeated easing of fiscal targets and political polarization have prevented meaningful deficit reduction.
- Who
- Desmond Lachman, former deputy director of the International Monetary Fund
- What
- A warning that a French sovereign debt crisis could have global repercussions
- When
- The article was published on October 10, 2026; the bond yield figure is dated October 9
- Where
- France
- Why
- Rising public debt and persistent budget deficits, alongside limited political progress on fiscal consolidation
This story does not have two clearly opposing sides.
Tout porte à craindre qu’une crise de la dette souveraine française ait des répercussions mondiales.
This story does not have a timeline yet.
- Public debt
- 119% of GDP today, up from just over 80% in 2010
- Budget deficit
- 5% of GDP
- French 10-year government bond yield
- 4.83% on October 9, 2026
- Forecast economic growth
- Below 1% in 2027, according to official forecasts cited in the article
- Public spending
- 57% of GDP
Sources
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