
France’s Social Security Budget Passes by Narrow Margin, Raising Fiscal Risks for 2026
France passed its social security budget, but the state budget remains unresolved, and the deficit outlook is worsening

France passed its social security budget, but the state budget remains unresolved, and the deficit outlook is worsening

Global supply chain problems and geopolitical concerns may have triggered debate among businesses about reshoring production closer to home, but the numbers tell us a different story. Reported euro area reshorings have steadily declined after being surpassed by offshorings in 2019, suggesting global supply chains remain deeply integrated

The composite PMI remained broadly unchanged in November (52.4 compared to 52.5 in October), which is well above the neutral level of 50. This suggests that growth in the short run remains decent despite significant global headwinds

French business confidence and PMI indicators edged higher in November, driven by renewed optimism in the service sector. This rebound could support growth in the coming months, despite more mixed signals from industry

Pricing in Czech production points to strength in domestic sectors such as services and construction, while declining prices in industry indicate that underlying fragility persists. We see potential underperformance of the eurozone as the sword of Damocles for Czech exporters. The Czech National Bank will live in a double-faceted world for some time

Czech headline inflation eased in September due to subdued food prices. Yet annual price growth in services and rising rents continue to pose a risk of entrenching inflation expectations given the economic upswing. That said, worrying news from the main eurozone trading partners threatens to dampen the growth outlook

The Dutch central bank may start sending out more approvals for the transitioning of Dutch pension funds from a defined benefit to a defined contribution model this week. But with the 1 January transition date fast approaching, we may also start hearing about more delays. Meanwhile, a US government shutdown could weigh on economic sentiment

Despite political uncertainty, business sentiment in France was steady in September. However, deeper cracks are emerging

Falling unemployment suggests that the eurozone economy remains resilient in the face of global uncertainty. Modest economic growth seems realistic for the coming quarters, as the strong labour market should aid some domestic recovery

French industrial production fell again in May, reinforcing the likelihood of a contraction in GDP in the second quarter. The outlook for the rest of the year remains bleak

The Euro area composite flash PMI improved to 50.4 in March (vs. 50.2 in February), a touch below consensus and close to our own expectations. The improvement was led by the manufacturing output index, which increased by 1.8pt to 50.7, the highest level in more than three years, while the services activity index edged down slightly to 50.4.

During the last two years, eurozone banks have been diversifying their sovereign bond portfolios, reducing a home-country bias. This is welcome news, and we expect this trend to continue.




































































