Bloomberg Talks Christopher Dembik Talks France's Investor Mood
Oct 8, 2025
Christopher Dembik, a Senior Investment Manager at Pictet Asset Management, shares insights on France's fiscal landscape. He warns that suspending pension reform could severely worsen the country's financial outlook, increasing deficits and pressuring sovereign debt. Dembik discusses how investors are adapting to prolonged political uncertainty and advocates for new elections over a left coalition. He also examines the potential impact on bond markets and advises caution in positioning portfolios given the current economic climate.
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Political Uncertainty Is Already Priced In
- Political uncertainty in France is expected to persist until the 2027 presidential election and is already priced into markets.
- French investors have trimmed exposure to domestic assets, so immediate market reaction has been muted.
Prefer Elections Over Far‑Left Rule
- Prefer a new election or a technical government rather than a far-left administration from an investor perspective.
- Avoid left-led policies that increase taxation because investors view them as negative for growth.
Cancelling Pensions Would Worsen The Deficit
- Suspending the pension reform would materially worsen France's fiscal metrics and require €20–30 billion annually of additional funding.
- That fiscal deterioration could trigger volatile moves in bond markets and potential speculative pressure.