France – 2025-2026 Scenario: Growth at a low ebb, amid exceptional global uncertainty

Economic activity declined slightly in France in Q4 2024 (-0.1% q/q), after +0.4% in Q3. This slight decline can be explained by a negative backlash after the Paris Olympic and Paralympic Games (OPG), which supported activity by +0.2 percentage point (pp) in Q3. Annual growth therefore stood at 1.1% in 2024, stable compared to 2023.
In Q1 2025, growth is expected to be low but positive (+0.2% q/q), and activity would gradually accelerate over the year. Annual growth is thus expected at 0.8% in 2025. This significant decline compared to the previous year is explained by the weak growth carry-over for 2025 at the end of 2024 (+0.2%) and the effect of the uncertainty that would weigh on activity in the first half of the year. Growth is expected to be driven by domestic demand (excluding inventories) in 2025, with in particular a slight acceleration in household consumption. Inflation is projected to decline again, to 1.1% in the sense of the CPI, after averaging 2% in 2024. Growth is expected to increase sharply in 2026 to +1.4%, with in particular a +0.3pp effect of the recently voted German public measures that would boost exports and to a lesser extent private investment. Inflation is projected to rebound slightly but remain low at 1.3% in 2026.
Our scenario assumes a significant reduction in the government deficit in 2025 (to 5.6%) and 2026 (to 5.1%), but less than the government's target.
Risks to activity are mainly tilted to the downside in the short term, with in particular only a partial integration of the tariff increase announced by D. Trump on April 2 in our scenario.