French 10-year bond yields have risen toward 4.9%, their highest level in more than 20 years, with the spread over German bonds near 140 basis points. IMF official Mateusz Szczurek said short-term debt risks are manageable given the market's liquidity, long maturities and diversified investor base, but yields staying higher for longer would add pressure on public finances. He stressed that France needs a credible medium-term consolidation plan, starting with a 2027 budget approved in time to meet EU fiscal rules, amid market worries that a fragmented political scene may struggle to pass deficit cuts before the April and May elections. France expects a deficit of 5.4% of GDP this year, with its 5.0% target now set for 2027, and must bring it below 3% by 2029. The IMF cut its growth forecasts for France to 0.4% this year and 0.7% in 2027, down from 0.9% previously.
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