Trésor-Eco
Review of the French Government’s Economic Forecasts for 2025
In the 2025 Budget Bill prepared in summer 2024, the French government forecast GDP growth of 1.1% in a less turbulent macroeconomic environment, with economic restrictions loosening their grip (lower inflation, monetary easing and brisker world trade). Uncertainty surrounding the motion of no confidence in Michel Barnier’s government and the Trump administration’s economic decisions hampered growth in 2025 which, while weaker than forecast (0.8%), had been resilient.
When drawing up the macroeconomic scenario for the 2025 Budget Bill in October 2024, the environment was generally favourable for the French economy, as the main restrictions that had caused economic slowdown in recent years had loosened (lower inflation and monetary easing, brisker world trade). GDP growth of 1.1% was expected, driven by household consumption and, to a lesser extent, foreign trade. The possibility of Donald Trump winning the US presidential election was nevertheless identified as one of the main hazards adversely affecting this scenario.
Trump’s victory and the subsequent economic decisions made by his administration – particularly in trade matters – have heightened global uncertainty. At the same time, in France, the motion of no confidence launched on 2 December 2024 brought more uncertainty. This double blow was dealt to household consumption, while private investment proved more resilient, remaining stable on the whole. The measures ultimately adopted in the 2025 Initial Budget Act also triggered a surge in public demand.
Overall, despite the uncertainty, the economy proved resilient. INSEE’s annual accounts, published in May 2026, showed France’s growth to be up 0.8%, 0.3 pp lower than the French government’s forecasts (see chart). Foreign trade’s contribution to GDP growth is significantly smaller than forecast in the 2025 Budget Bill, primarily as a result of supply shortages faced by the aerospace sector. However, these shortages have only had a slight impact on growth, with the strong contribution of inventories being attributed to non-delivered in-production aircraft.
