France – 2024-2025 Scenario: recovery on the horizon

Economic activity slowed significantly in France in 2023 on persistently high inflation and emphatic monetary tightening. The French economy grew 0.9% over the year (seasonal and working-day adjusted), after 2.5% in 2022, but avoided a recession. 

The economy is expected to recover in 2024, with annual growth stable at 0.9% but with higher quarterly growth than in 2023. Annual growth is expected to be adversely affected by sluggish activity in the second half of 2023, with a very low growth overhang for 2024 at the end of fourth-quarter 2023. The recovery will be driven by household consumption as disinflation continues, while investment will continue to be impacted by the past tightening of financial conditions. 

Growth is expected to increase to 1.3% in 2025, bolstered by persistent strong consumption momentum and the rebound in investment as monetary policy returns to normal. Annual average inflation is expected to fall sharply, to 2.5% in 2024 in CPI terms (after 4.9% in 2023) and 2.1% in 2025.