Fragile Economic Recovery Across French Overseas Territories Amid Cyclone Aftermath
Economic recovery remains fragile in France's overseas territories, influenced by recent cyclones and varied sectoral performances.
Key Points
- • IEDOM report highlights uneven recovery across territories.
- • La Réunion suffers significant economic decline due to cyclones.
- • Mayotte shows signs of recovery and improved business sentiment.
- • Cyclone impacts lead to mixed growth indicators across French overseas territories.
The economic recovery in French overseas territories is proving uneven and fragile as of mid-2025, according to the latest report from the Institut Économique des Départements d’Outre-Mer (IEDOM). Each territory showcases distinct challenges and signs of recovery influenced by recent cyclones and varying sectoral performance.
La Réunion is experiencing a notable economic decline, largely due to damage from cyclones Garance and Belal, totaling €480 million. The situation has eroded business confidence, with approximately 50% of surveyed leaders citing negative impacts. However, a slight 2.8% increase in vehicle registrations is flashing a minor positive signal amid the gloom.
Conversely, Mayotte shows brighter prospects with an 8.4 point rise in business sentiment following cyclone Chido, invigorated by increased household spending and a substantial 22.8% spike in imports, although construction remains hindered by cash flow issues.
Polynesia’s economy, while stable, faces a 3% decline in cruise tourism, thus tempering growth expectations. In New Caledonia, improvements in mining contrast with longstanding challenges in both tourism and consumer spending.
Martinique has seen a slight uptick in the business climate index, while household consumption stagnates. Guadeloupe is feeling the pressure of a significant slowdown in the public works sector and declining construction permits.
Guyane's business climate has worsened due to port strikes, with import volumes down by 18.6%. Finally, Saint-Pierre and Miquelon has recorded its first inflation decrease in four years, owing to lower energy prices, yet the consumer spending remains weak. This complex landscape underscores the challenges and varying trajectories faced by these regions as they strive for economic recovery.
Amid these developments, the future recovery plans will be crucial to support and sustain growth across these territories.