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The new year gives the French the opportunity to make certain resolutions. Unfortunately, if the idea of starting sports, reading more books or eating healthier is theirs, some data escapes them.
Economic issues are among the main concerns of the French, as indicated by a recent Ipsos survey commissioned by the Economic, Social and Environmental Council (CESE). According to this survey, 34% of respondents are worried about their purchasing power, while 28% fear the economic and financial situation of the country, an increase of five points compared to the previous year. Concerns that will not disappear in 2025.
An increasing tax pressure for the French
To talk about purchasing power, we have to talk about taxes. It’s never a pleasant moment. The tax season is approaching and it risks weighing heavily on the economies of the French.
Indeed, taxes will have more weight in 2025. The latter should represent 43.6% of GDP, up from 43.2% in 2023 and 42.8% in 2024. At the same time, public spending remains at a high level. They will effectively reach 56.4% of GDP for the coming year.
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At the same time, note that France is losing its appeal to investors, partly due to the growing difference in rates of return (the “spread”) between Paris and Berlin. This gap increased from 65.1 points in 2022 to 76.5 points in 2024.
In other words, this increases the risk premium required to invest in France. To put it simply, it becomes more advantageous for investors to operate elsewhere in Europe, particularly in Germany. The consequences for the French are as follows: fewer jobs, less economic growth, less competitiveness and real economic uncertainty.
Slow growth
French economic growth will be limited in 2025. The Banque de France has indeed just revised its forecasts downwards. So, it estimates growth of 0.9% of GDPor 0.3 points less than what it initially forecast.
For its part, INSEE is even more pessimistic, counting on almost total stagnation: GDP growth could cap at 0.2% during the first two quarters. For the French, this slow growth will have consequences. In fact, this can increase the unemployment rate and stagnate or even reduce income.
For its part, public debt, already worrying in 2024, should continue to weigh heavily in 2025. It reached 1,000 billion euros in the fourth quarter of 2024, compared to 947 billion in the second quarter of the same year. To finance this growing deficit, the State plans to borrow 300 billion euros on the markets in 2025, according to Agence France Trésor.
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The French face rising unemployment
The job market is expected to suffer from poor economic performance and the austerity measures needed to restore public accounts. The unemployment rate could reach 7.5% in mid-2025 and climb to 8% by the end of the year.
According to information from RMC, around 150,000 jobs could disappear in 2025. This situation is reminiscent of the 2012 crisis. If inflation is behind us, the economic situation nonetheless remains very uncertain for the French.
Indeed, all of these factors contribute to fueling the ambient pessimism. Between the tax burden, the decline in economic attractiveness, the increase in unemployment and the stagnation of growth2025 promises to be a difficult year for the French.
