Michel Barnier had nevertheless warned. Just a few days before being kicked out of Matignon, the short-lived Prime Minister had warned that “a storm” threatened France in the event of censorship. In view of the projections for this new year 2025, which are not really encouraging, the French economy could long rehash the curse launched by the Brexit negotiator before his hasty departure.
Growth
The nerve of the war, the Banque de France is counting on growth of 0.9% for the coming year, compared to 1.1% in 2024 according to its estimates. “Two things drove growth last year,” says Stéphanie Villers, macro-economist. Public administration spending and investments, and consumption during the Olympic Games. Point from Léon Marchand and other Félix Lebrun expected in 2025 in Paris, and for the administrations, “in view of our debt and our deficit, it is no longer possible to drive growth through public spending”, warns the expert. Two fewer levers for the country's economy.
For the Bureau of Economic Information and Forecasts (BIPE), the situation should improve very slightly in 2025. Its economic head, Anne-Sophie Alsif, takes out the calculator in turn: “While we estimate growth at 0 .9% in 2024, it should reach 1% in 2025, driven in particular by higher household consumption.
An optimism that Marc Touati, economist at Etoro, certainly does not share, and who predicts ridiculous growth of 0.5%. “Government forecasts are unrealistic. Business investment has been falling for four consecutive semesters, housing investment for thirteen weeks, and political instability will paralyze the country and confidence. 2024 was a bad year economically, but 2025 will be worse. »
The deficit
First crucial mission for Stéphanie Villers, “to finish the 2024 budget as quickly as possible”. As long as no new budget is voted on, it is last year's budget that applies, “and the latter has demonstrated all its ineffectiveness and its deleterious effect on public accounts”, warns the specialist. The situation could drag on, given that several political camps are already threatening Bayrou's government with censorship.
With this first ball and chain, and softened confidence in the country's economy, particularly by foreign investors, “the deficit should not fall much”, estimates Anne-Sophie Alsif. According to BIPE forecasts, it should reach 5.8% of GDP, compared to 6.1% in 2024, far from the objective of 5.4% announced by the new government. For Marc Touati, who is therefore starting with a much weaker growth forecast, the deficit could even exceed 6% again. “Which will ultimately tire the rating agencies, who are very patient with our situation, and which could end up downgrading our rating. »
The Banque de France cites a deficit range of between 5% and 5.5%. “We will have to monitor the German situation closely,” warns Stéphanie Villers, while early elections are planned for February across the Rhine. “If Berlin decides on a vast plan to support its economy through borrowing, there will be competition on the financial markets, and investors will undoubtedly turn to German debt, which is much more reassuring. This will push France to borrow at higher rates, and therefore increase the debt and the deficit. »
Unemployment
“It is likely to rise again, more bad news for the country. Investments are slowing down, whether from abroad or from French companies. France no longer inspires confidence and its political instability harms its attractiveness,” warns Stéphanie Villers. The Bank of France cites unemployment at 7.8%, compared to 7.4% in 2024. Same forecast for the BIPE, confirms Anne-Sophie Alsif. “According to Eurostat, youth unemployment is already at 21% and it is expected to increase,” adds Marc Touati, always there to drive the point home.
Household consumption and purchasing power
A bit of good news though. Household consumption should increase, helped by continued disinflation. “From 2.3% in 2024, inflation should decrease to 1.5% in 2025, a gain in purchasing power which could push us to start again,” welcomes Stéphanie Villers. Especially since savings will be less attractive. The Livret A, for example, will go from 3% interest rate to 2.5% from February 1.
“While business investments will make a negative contribution to the French economy, household consumption should be positive,” rejoices Anne-Sophie Alsif. The French savings rate, estimated at 18% of gross income in 2024, should fall to 17.2%. An essential data for the French economy. “It’s reassuring because it shows that the economic potential is there, but that it must be spent. In the United States, this rate is only 4% for example,” indicates the economic head of BIPE.
But we keep coming back to the same point: for households to spend, they must regain confidence, and therefore better political stability in the country. Suffice to say, given the situation of the National Assembly, the French economy is indeed not out of the woods in 2025.
