French Economy Shows Resilience with 0.9% Growth in 2025 Amid Uncertainties

France's economy demonstrated notable resilience in 2025, achieving a growth rate of 0.9% according to the National Institute of Statistics and Economic Studies (Insee), surpassing the government's earlier forecast of 0.7%. The growth was partly driven by a 0.2% increase in GDP in the fourth quarter, aligning with economist projections despite a slightly lower rate compared to 2024's 1.1% growth.

Household consumption data revealed a nuanced picture. While consumption fell by 0.6% in December, it showed a moderate acceleration throughout the year, increasing by 0.3% overall. Specific sectors, including clothing-textiles (+0.7%), refined petroleum products (+1.5%), and goods equipment (+1%), saw spending rises, whereas food consumption remained steady. Services consumption rose slightly by 0.2%, buoyed by transportation services, particularly rail.

A key challenge has been the elevated savings rate, with households saving 18% to 18.4% of disposable income—three points higher than pre-pandemic levels—reflecting caution amid lingering economic uncertainty. This trend persisted despite reduced inflation towards the year's end. Rising prices in some goods impacted spending patterns; for example, end-of-year products like chocolates rose by 22% year-on-year.

Investment activity slowed in the last quarter of 2025, but trade contributed positively to the economy. The year's economic growth unfolded against a backdrop of geopolitical and commercial risks and ongoing political instability, including uncertainty around the 2026 budget approval.

Looking forward, growth forecasts for 2026 remain cautious. Insee predicts 0.3% growth for the first half of 2026, while the government expects a slight improvement to 1% overall. The Bank of France shares this outlook for both 2026 and 2027, though the French Observatory for Economic Conjunctures suggests a more conservative scenario at 0.7% growth.

Eric Heyer, Director of Analysis and Forecast at the Observatoire français des conjonctures économiques, described 2025 as "a satisfactory year," while acknowledging that growth falls short of levels seen before the COVID-19 crisis, signaling a new norm of around 1% growth amid budget constraints and global uncertainties.