{"id":14983,"date":"2025-01-21T07:00:43","date_gmt":"2025-01-21T05:00:43","guid":{"rendered":"https:\/\/globalconnectadmin.com\/de\/?p=14983"},"modified":"2025-01-20T23:04:23","modified_gmt":"2025-01-20T21:04:23","slug":"economic-forecast-2025-france-3","status":"publish","type":"post","link":"https:\/\/globalconnectadmin.com\/nl\/economic-forecast-2025-france-3\/","title":{"rendered":"Economic forecast 2025: France"},"content":{"rendered":"\n[et_pb_section fb_built=”1″ _builder_version=”4.16″ global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||” theme_builder_area=”post_content”][et_pb_text _builder_version=”4.27.4″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]

\"\"<\/span><\/p>\n

As a continuation of last week\u2019s topic, today\u2019s article focuses on economic forecast for France.<\/span><\/p>\n

France\u2019s economic performance was expected to remain resilient in 2024, supported by public expenditures and robust foreign trade. However, fiscal adjustments and political uncertainties are projected to weigh on growth in subsequent years.<\/span><\/p>\n

Economic Growth Trends<\/span><\/strong><\/p>\n

Real GDP in France was forecast to grow by 1.1% in 2024, driven by strong net exports, particularly in transport equipment, alongside public consumption and investment. However, private demand remained muted due to restrictive financial conditions and elevated household savings.<\/span><\/p>\n

In 2025, GDP growth is expected to slow to 0.8%, constrained by a contractionary fiscal stance. Private investment may remain subdued as the effects of monetary policy easing take time to materialize, while economic uncertainty persists. Nonetheless, disinflation and rising real wages are likely to bolster private consumption.<\/span><\/p>\n

By 2026, economic activity is anticipated to rebound, with GDP growth projected at 1.4%. This recovery is expected to be fuelled by reduced fiscal tightening, declining credit costs, and stronger private domestic demand, as savings rates gradually decrease and investment benefits from monetary policy adjustments.<\/span><\/p>\n

Labour Market Developments<\/span><\/strong><\/p>\n

France\u2019s labour market demonstrated resilience in early 2024, with the unemployment rate falling to 7.3% in the second quarter, its lowest since 2008. The employment rate also reached a record 74.7%. However, employment growth is forecast to slow in 2025 and 2026 as the impact of apprenticeship contracts diminishes and labour productivity improves. The unemployment rate is expected to rise slightly to 7.5% in 2025 and 7.6% in 2026.<\/span><\/p>\n

Inflation Trends<\/span><\/strong><\/p>\n

Inflation in France is projected to stabilize below 2% over the medium term. After reaching 1.5% in October 2024 due to declining energy and food prices, inflation expected to average 2.4% in 2024 before easing to 1.9% in 2025 and 1.8% in 2026. Energy prices are forecast to moderate further, contributing to a more stable inflation environment.<\/span><\/p>\n

Fiscal Challenges and Public Debt<\/span><\/strong><\/p>\n

France\u2019s government deficit was set to increase to 6.2% of GDP in 2024, driven by lower-than-expected tax revenues and high public expenditure growth. Efforts to reduce the deficit in 2025 include revenue-increasing measures worth \u20ac21.6 billion and expenditure cuts of \u20ac12 billion. Despite these measures, the deficit is forecast to remain at 5.3% of GDP in 2025 and stabilize at 5.4% in 2026.<\/span><\/p>\n

Public debt is projected to rise steadily, reaching 117.1% of GDP by 2026, up from 109.9% in 2023. This increase is attributed to persistent primary deficits and rising interest payments, while the debt-reducing effect of nominal growth is expected to weaken.<\/span><\/p>\n

Political Uncertainty and Credit Downgrade<\/span><\/strong><\/p>\n

France\u2019s political landscape has added to economic challenges, with recent turmoil leading to the ousting of Prime Minister Michel Barnier in December 2024. His successor, Fran\u00e7ois Bayrou, faces the daunting task of uniting a fragmented parliament to pass emergency legislation and prevent a government shutdown.<\/span><\/p>\n

Ratings agency Moody\u2019s recently downgraded France\u2019s credit rating to Aa3, citing concerns over the growing deficit, which is expected to breach EU limits for the foreseeable future. Moody\u2019s forecasts the deficit to reach 6.3% of GDP in 2025, while the Bank of France offers a more optimistic estimate of 5-5.5%.<\/span><\/p>\n

Conclusion<\/span><\/strong><\/p>\n

France\u2019s economic outlook for 2025 highlights a delicate balancing act between fiscal consolidation and supporting growth. While GDP growth is expected to decelerate to 0.8%, efforts to reduce the deficit through increased revenues and expenditure cuts may dampen economic activity. Private consumption is likely to see modest improvement, supported by disinflation and real wage growth, but investment may remain constrained by lingering economic and policy uncertainties. Navigating these challenges will require careful coordination of fiscal and monetary policies to sustain stability and lay the groundwork for a stronger recovery in 2026.<\/span><\/p>\n

References<\/span><\/h1>\n

Butler, E. (2024, December 17). French central bank lowers 2025 growth forecast after tumultuous year<\/em>. Retrieved from EuroNews: https:\/\/www.euronews.com\/business\/2024\/12\/17\/french-central-bank-lowers-2025-growth-forecast-after-tumultuous-year<\/span><\/p>\n

European Commission. (2024, November 15). Economic forecast for France<\/em>. Retrieved from European Commission: https:\/\/economy-finance.ec.europa.eu\/economic-surveillance-eu-economies\/france\/economic-forecast-france_en<\/p>\n

Photo:
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As a continuation of last week\u2019s topic, today\u2019s article focuses on economic forecast for France. France\u2019s economic performance was expected to remain resilient in 2024, supported by public expenditures and robust foreign trade. However, fiscal adjustments and political uncertainties are projected to weigh on growth in subsequent years. Economic Growth Trends Real GDP in France […]<\/p>\n","protected":false},"author":4,"featured_media":14977,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"[et_pb_section fb_built=\"1\" _builder_version=\"4.16\" global_colors_info=\"{}\" theme_builder_area=\"post_content\"][et_pb_row _builder_version=\"4.16\" background_size=\"initial\" background_position=\"top_left\" background_repeat=\"repeat\" global_colors_info=\"{}\" theme_builder_area=\"post_content\"][et_pb_column type=\"4_4\" _builder_version=\"4.16\" custom_padding=\"|||\" global_colors_info=\"{}\" custom_padding__hover=\"|||\" theme_builder_area=\"post_content\"][et_pb_text _builder_version=\"4.27.4\" background_size=\"initial\" background_position=\"top_left\" background_repeat=\"repeat\" hover_enabled=\"0\" global_colors_info=\"{}\" theme_builder_area=\"post_content\" sticky_enabled=\"0\"]

\"\"<\/span><\/p>\n

As a continuation of last week\u2019s topic, today\u2019s article focuses on economic forecast for France.<\/span><\/p>\n

France\u2019s economic performance was expected to remain resilient in 2024, supported by public expenditures and robust foreign trade. However, fiscal adjustments and political uncertainties are projected to weigh on growth in subsequent years.<\/span><\/p>\n

Economic Growth Trends<\/span><\/strong><\/p>\n

Real GDP in France was forecast to grow by 1.1% in 2024, driven by strong net exports, particularly in transport equipment, alongside public consumption and investment. However, private demand remained muted due to restrictive financial conditions and elevated household savings.<\/span><\/p>\n

In 2025, GDP growth is expected to slow to 0.8%, constrained by a contractionary fiscal stance. Private investment may remain subdued as the effects of monetary policy easing take time to materialize, while economic uncertainty persists. Nonetheless, disinflation and rising real wages are likely to bolster private consumption.<\/span><\/p>\n

By 2026, economic activity is anticipated to rebound, with GDP growth projected at 1.4%. This recovery is expected to be fuelled by reduced fiscal tightening, declining credit costs, and stronger private domestic demand, as savings rates gradually decrease and investment benefits from monetary policy adjustments.<\/span><\/p>\n

Labour Market Developments<\/span><\/strong><\/p>\n

France\u2019s labour market demonstrated resilience in early 2024, with the unemployment rate falling to 7.3% in the second quarter, its lowest since 2008. The employment rate also reached a record 74.7%. However, employment growth is forecast to slow in 2025 and 2026 as the impact of apprenticeship contracts diminishes and labour productivity improves. The unemployment rate is expected to rise slightly to 7.5% in 2025 and 7.6% in 2026.<\/span><\/p>\n

Inflation Trends<\/span><\/strong><\/p>\n

Inflation in France is projected to stabilize below 2% over the medium term. After reaching 1.5% in October 2024 due to declining energy and food prices, inflation expected to average 2.4% in 2024 before easing to 1.9% in 2025 and 1.8% in 2026. Energy prices are forecast to moderate further, contributing to a more stable inflation environment.<\/span><\/p>\n

Fiscal Challenges and Public Debt<\/span><\/strong><\/p>\n

France\u2019s government deficit was set to increase to 6.2% of GDP in 2024, driven by lower-than-expected tax revenues and high public expenditure growth. Efforts to reduce the deficit in 2025 include revenue-increasing measures worth \u20ac21.6 billion and expenditure cuts of \u20ac12 billion. Despite these measures, the deficit is forecast to remain at 5.3% of GDP in 2025 and stabilize at 5.4% in 2026.<\/span><\/p>\n

Public debt is projected to rise steadily, reaching 117.1% of GDP by 2026, up from 109.9% in 2023. This increase is attributed to persistent primary deficits and rising interest payments, while the debt-reducing effect of nominal growth is expected to weaken.<\/span><\/p>\n

Political Uncertainty and Credit Downgrade<\/span><\/strong><\/p>\n

France\u2019s political landscape has added to economic challenges, with recent turmoil leading to the ousting of Prime Minister Michel Barnier in December 2024. His successor, Fran\u00e7ois Bayrou, faces the daunting task of uniting a fragmented parliament to pass emergency legislation and prevent a government shutdown.<\/span><\/p>\n

Ratings agency Moody\u2019s recently downgraded France\u2019s credit rating to Aa3, citing concerns over the growing deficit, which is expected to breach EU limits for the foreseeable future. Moody\u2019s forecasts the deficit to reach 6.3% of GDP in 2025, while the Bank of France offers a more optimistic estimate of 5-5.5%.<\/span><\/p>\n

Conclusion<\/span><\/strong><\/p>\n

France\u2019s economic outlook for 2025 highlights a delicate balancing act between fiscal consolidation and supporting growth. While GDP growth is expected to decelerate to 0.8%, efforts to reduce the deficit through increased revenues and expenditure cuts may dampen economic activity. Private consumption is likely to see modest improvement, supported by disinflation and real wage growth, but investment may remain constrained by lingering economic and policy uncertainties. Navigating these challenges will require careful coordination of fiscal and monetary policies to sustain stability and lay the groundwork for a stronger recovery in 2026.<\/span><\/p>\n

References<\/span><\/h1>\n

Butler, E. (2024, December 17). French central bank lowers 2025 growth forecast after tumultuous year<\/em>. Retrieved from EuroNews: https:\/\/www.euronews.com\/business\/2024\/12\/17\/french-central-bank-lowers-2025-growth-forecast-after-tumultuous-year<\/span><\/p>\n

European Commission. (2024, November 15). Economic forecast for France<\/em>. Retrieved from European Commission: https:\/\/economy-finance.ec.europa.eu\/economic-surveillance-eu-economies\/france\/economic-forecast-france_en<\/p>\n

Photo:
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