By Leigh Thomas
PARIS, Sept 11 (Reuters) - France's economy will grow less than expected this year and the government will miss its budget deficit target, Finance Minister Roland Lescure said on Friday.
The downgraded outlook complicates the government's task of getting its 2027 budget passed in the coming months in a deeply divided parliament, where parties have hardened their positions before an April-May two-round presidential election.
Lescure told journalists he was lowering the government's 2026
economic growth forecast to 0.5% from 0.7% previously, but stuck with a projection of 1.0% for next year.
"This year has been marked by extreme crises involving four different types of shocks," Lescure told reporters.
Slower growth will make it more difficult for the government to trim its fiscal budget deficit as planned to 5.0% of economic output this year.
"The reality is that the budget was built on a 5% assumption. And the reality is that, today, 5% is no longer an option," Lescure said.
The minister did not give a new deficit target.
The economic fallout from the war in the Middle East andsummer heatwaves and drought that hit agriculture output have dragged down growth and put the government's fiscal targets out of reach.
"I think it is reasonable to say that economic uncertainty has never been greater than it is today," Lescure said. "We are operating under tight budgetary constraints; there is no more fat to trim."
Further complicating the picture, French borrowing rates have surged in recent weeks as investors have identified France as one of the weaker links in a global bond selloff due to its weak public finances and serial slippage on its deficit-reduction plans.
Lescure stressed that France had no difficulties in issuing debt, but acknowledged that it now cost more.
(Reporting by Leigh Thomas; additional reporting by Makini Brice, Ingrid Melander and Dominique Vidalon; Editing by Kim Coghill)
