Signs of Resilience in the French Economy Amid Economic Challenges
The French economy shows signs of resilience amidst economic challenges, with improvements in SME outlook and household savings.
Key Points
- • French SMEs report a 15-point increase in activity outlook for 2025.
- • Business failures stabilize with only a 1.3% increase in Q2 2025.
- • Household savings reach record high of 18.8%, reflecting cautious consumer behavior.
- • 86% of small business leaders remain negative about their prospects despite improvements.
Recent indicators suggest that the French economy is displaying resilience despite ongoing challenges, including concerns surrounding new tariffs. A survey conducted by Bpifrance Le Lab shows a significant 15-point rise in activity outlook among larger SMEs, anticipating a 2.7% revenue growth by the end of 2025. Exporting and innovative firms similarly express optimism for recovery as they prepare for potential economic shifts following Donald Trump's announcement of a 30% tariff on European goods, set to take effect on August 1. This announcement has raised alarms particularly in the agri-food and engineering sectors, where 6% of companies are expected to feel the impact.
Additionally, business activity in June experienced a boost, largely credited to recovering sectorial performances post-public holidays, with the Bank of France projecting overall growth of 0.6% for the year. Business failures have also stabilized, with 16,586 insolvency procedures reported in the second quarter of 2025, marking just a 1.3% increase from the previous year—a notable drop from the 23% rise experienced in 2023.
French households are showing cautious financial behavior, reflected in a record savings rate of 18.8%, the highest in 45 years (excluding the impact of the health crisis). While SMEs continue to exhibit strong fundamentals, the survey from the SDI reveals ongoing concerns, with 86% of small business leaders expressing negative perceptions of their prospects, highlighting the delicate balance of optimism and uncertainty within the economy.