France has cut its growth forecast for this year to 0.5% from 1%, Prime Minister Francois Fillon has announced.
The revision was made to "take into account the deterioration of the economic situation", he said.
It comes as European leaders meet in Brussels to discuss the eurozone crisis, and are expected to focus on growth and job creation.
On Sunday, President Nicolas Sarkozy announced plans to introduce a tax on financial transactions.
The 0.1% levy, to be introduced in August, is part of a package of measures designed to promote growth, set out by Mr Sarkozy in the run-up to April's presidential election.
Last week, the International Monetary Fund revised down its forecasts for several European countries, including France. It now expects the eurozone's second biggest economy to grow by just 0.2% this year, down from 1.4%.