Banque de France Lowers 2025 Growth Forecast to 0.6%
The Banque de France has revised its GDP growth forecast for 2025 down to 0.6%, citing economic slowing and global uncertainties.
Key Points
- • Banque de France lowers 2025 GDP growth forecast to 0.6%.
- • This is the third consecutive reduction amid slowing economic activity.
- • Forecasts for 2026 and 2027 are also downgraded to 1% and 1.2% respectively.
- • Household consumption remains a key growth driver, albeit at a slower pace.
The Banque de France announced a downward revision of its GDP growth forecast for 2025, now estimating an increase of only 0.6%, a reduction from the previously anticipated 0.7% made in March and 0.9% in December of the prior year. This marks the third consecutive downward adjustment, reflective of a decelerating economic activity in the country. Olivier Garnier, the director general of statistics and studies at the Banque, described this trend as "growth slowing, but without recession."
Future projections have also been downgraded, with estimates falling to 1% for 2026 and 1.2% for 2027, complicating the government’s budget preparation for 2026 led by Prime Minister Bayrou. The revisions are attributed to global economic uncertainties and changes in U.S. trade policy under former President Donald Trump which have led to increased tariffs. Garnier noted that this uncertainty may cost France approximately 0.4 GDP points over three years.
Despite challenges, household consumption remains the primary driver of growth, though it is expected to rise by only 0.7% this year compared to 0.9% last year. Household savings are projected to stay relatively high at 18.1%. Inflation forecasts are low at around 1% largely due to falling energy prices, while the unemployment rate is expected to remain stable between 7.4% and 7.6% in the upcoming years.
With these figures, the Banque de France’s latest outlook poses significant implications for economic policy and planning in the near future.