French Economy Ends 2025 on Stronger Note Despite Persistent Challenges

The French economy surprised analysts by finishing 2025 with better-than-expected growth, registering an estimated GDP increase of 0.9% for the year. This marks a modest acceleration after a 0.2% growth in the final quarter, according to a monthly economic survey from the Bank of France released on January 13, 2026. Although the growth is below the country’s historical average of 0.9% over the past 15 years, it aligns with government forecasts and indicates resilience amidst a turbulent global landscape.

Economic shocks during the year included fresh tariffs imposed by the US, the ongoing war in Ukraine, and weaker growth in Germany. Despite these hurdles and a delayed national budget agreement, certain sectors bucked the trend. The industrial sector, notably aerospace and defense, recorded a 0.4% rise in value added between Q3 and Q4 2025. However, manufacturing's share remains under 10% of GDP, benefiting mostly select small and medium-sized enterprises.

Tourism, a vital pillar of the French economy generating over €130 billion annually and supporting more than one million jobs, showed mixed results. Domestic tourism, accounting for 75% of stays, displayed fragile growth compared to international demand. Rail traffic increased by 3% with 232 million tickets sold, and air travel rose 4.3%, driven by passenger inflows from South America and the Middle East. Yet, the hospitality sector's growth rate of 1.4% lagged behind European counterparts like Spain and Italy, highlighting rising competition from Central and Eastern Europe.

Dominique Marcel, president of Alliance France Tourisme, emphasized the need for a more balanced, competitive, and sustainable tourism strategy to ensure enduring sector health. The tourism sector also positively contributed €22 billion to France’s trade balance last year, offsetting deficits elsewhere.

With challenging economic headwinds persisting and global uncertainties ongoing, France’s economy closed the year on a cautiously optimistic footing, buoyed by industrial resilience and a strategically important but evolving tourism sector.