OECD slashes Frances 2026 growth forecast to 0.9 amid Middle East conflict risks
The OECD has slashed France’s 2026 growth forecast to 0.9%—the lowest in the eurozone—warning that prolonged Middle East conflict could push the country into recession by early 2027. The downgrade, announced Wednesday, reflects France’s heavy reliance on Middle Eastern energy imports and its exposure to soaring industrial costs, according to the organization’s latest economic outlook .
The Paris-based think tank now projects French GDP growth will trail Germany (1.1%) and the eurozone average (1.2%), a reversal from pre-war expectations. Energy-intensive sectors—automotive, chemicals, and steel—face the sharpest contraction, with the European Commission estimating up to 280,000 French jobs at risk if the conflict disrupts oil and gas flows through the Strait of Hormuz .
Inflation in France is forecast to average 3.1% in 2026, above the ECB’s 2% target, as higher energy costs feed into consumer prices. The OECD’s baseline scenario assumes no further escalation, but warns that a full-year supply shock could halve French growth to 0.4% and trigger a "technical recession" by Q1 2027 .
Finance Minister Bruno Le Maire has called the outlook "a wake-up call," urging accelerated investment in nuclear and renewable energy to reduce dependence on Middle Eastern imports. France’s current energy mix—70% nuclear, 15% renewables, and 15% fossil fuels—remains vulnerable to geopolitical shocks, with the government’s €50 billion green transition plan now under review [background context].
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