France Eyes Modest Economic Growth of 0.7% in 2025 Amid Political Uncertainty

Recent data show that France's economy is exhibiting signs of resilience amid challenging conditions. The national statistics agency Insee reported a 0.5% economic growth in the third quarter of 2023 — the highest in nearly two years — positioning France ahead of many major European economies such as Germany and Italy. Business investments have increased despite a politically uncertain regulatory environment, and households are gradually spending from their accumulated savings, supporting slight upward consumption trends. Anne-Sophie Alsif, chief economist at BDO, described these as "good" figures, signaling a positive shift as businesses moved from negatively contributing to growth to driving it with abundant liquidity from a 19% savings rate. Looking ahead, she projects French GDP growth could reach around 1% in 2024, with optimistic estimates pushing as high as 1.2%, though still below previous years’ growth rates of 1.2% in 2024 and 1.4% in 2023.

Complementing this outlook, François Villeroy de Galhau, governor of the Banque de France, forecasted economic growth of at least 0.7% in 2025 and 0.9% in 2026. Speaking at a press conference, Villeroy highlighted the adverse effects of political and international uncertainty, gauging that such uncertainty reduces France's growth by an estimated 0.5 percentage point. The governor stressed the importance of sustained growth to finance social expenditures amid budget challenges and debates surrounding pension reform in the National Assembly. The Banque de France maintains its September projections for growth but will issue updated forecasts on December 19.

Together, these analyses underscore France’s current economic environment as one of cautious recovery amid persistent political and fiscal challenges. While growth remains modest and below historic averages, the resilience of businesses and households points to a foundation for further progress if uncertainties can be mitigated.