French economy not in danger but deficit must be cut, central bank chief says

PARIS, Sept 11 (Reuters) - French central bank chief Emmanuel Moulin said on Friday that France was not in catastrophic economic danger but the government must act to reduce the country's public deficit.

Moulin was speaking after INSEE revised its economic forecast for the euro zone's second-largest economy lower on Thursday, predicting growth of just 0.4% this year. Moulin cited several factors such as a deadly heatwave and issues at Airbus.

France's national statistics institute previously forecast growth of 0.7% for 2026, short of last year's 0.9% expansion.

"I wouldn't say it (the economy) is in danger, but it is in a situation that's worrisome and unsatisfactory," Moulin told RTL radio.

"We need to reduce the budget deficit. But beyond that, the French economy has its strengths. It has inexpensive energy and a diversified economy. We're seeing an industrial upturn across promising sectors such as data centres, defence, and aerospace. So the situation isn't entirely catastrophic," he added.

The French government is expected to lower its own growth forecast, currently at 0.7%, on Friday as it prepares to send its 2027 budget bill to parliament at the end of the month. 

(Reporting by Dominique Vidalon; Editing by Makini Brice and Alexander Smith)