France: INSEE predicts slower growth of 0.6% in 2025

" The Eurozone is slowly emerging from its torpor, despite the turnaround in global trade ," with a revival of investment in particular, but " the French economy does not seem to be evolving in step with the continent ," the National Institute of Statistics emphasizes in its economic report.

" While in 2023 and 2024, French activity had held up rather better (...) than in other European countries, the French engines are now running out of steam ," he explained.

The INSEE forecast is lower than the government's, which is counting on growth of 0.7%. After a 0.1% increase in the first quarter, the public body predicts a 0.2% increase in GDP in each of the following three quarters.

A traditional pillar of French growth, household consumption is expected to increase only moderately (0.7% after 1.0% in 2024), at the same rate as purchasing power (after 2.5%), despite softening inflation, expected to be around 1% at the end of the year.

After 18.8% in the first quarter, a 45-year peak (excluding the health crisis), the household savings rate is expected to fall slightly to 18.2% over the year (and even to 17.3% at the end of the year), remaining however at a high level, a sign of the prevailing wait-and-see attitude.

Investments are expected to continue to decline, but less sharply (-0.5% after -1.3%), notably among businesses (-0.8%) and households (-0.6%), with new housing construction showing signs of recovery. Government investments are expected to fall into negative territory (-0.6%).

Companies would also see their situation deteriorate, suffering from higher interest rates on their new loans and, for the largest of them, from a surcharge planned in the 2025 budget.

Further darkening the picture, the support of foreign trade for growth observed in 2023 and 2024 would disappear: it would even remove 0.7 points of growth, with French manufacturers losing market share.

The INSEE estimates the impact of the US customs tariffs on France at 0.1 points of GDP in 2025, both due to the direct commercial impact and the uncertainty and financial tensions it generates, and at 0.4 to 0.6 points in 2026 depending on whether or not there are response measures.