France's public debt is forecast to reach 119.3% of GDP this year and 121.7% in 2027, Finance Ministry officials said, the highest level since records began in 1978. The projections place public debt in Europe's second-largest economy at more than double the EU limit of 60% of GDP, The Telegraph reported.

The rise in national debt has become "automatic" as "a consequence of a deficit that remains high," ministry sources told French media at the weekend. The Ministry expects to end the year with a budget deficit of 5.4%, up from 5.1% in 2025, as France grapples with spiralling borrowing costs.

Charlotte de Montpellier, an economist at ING, said, "This leaves France increasingly exposed to higher refinancing costs. The implicit interest rate on public debt has risen from 1.25% in 2020 to around 2% in 2025."

The country's debt-to-GDP ratio is expected to surge past previous records set in early 2021, during the early stages of the pandemic. At close to 120%, it would be the highest on record dating back to 1978, according to the French statistics institute Insee.

Source:Websites