Pending a finance bill for the current year, Prime Minister François Bayrou revised downwards on Tuesday the growth forecast for the French economy, weighed down by uncertainty and the savings to be made .
A pragmatic Prime Minister. In his general policy speech presented Tuesday before the National Assembly, François Bayrou recognized that the French economic dynamic, already sluggish in 2024, would logically be affected, in 2025, by the political instability of recent months and the need to achieve significant savings.
The government has therefore decided to review its growth forecast for 2025. “It was 1.1% before the censorship, we set it at 0.9%, in accordance with the forecasts of the Banque de France,” indicated François Bayrou.
In addition, he specified that the next finance bill, which should be ready in the spring, will propose “setting the public deficit objective for 2025 at 5.4% of GDP”.
“This orientation towards a return to balance, which will necessarily be multi-annual and respectful of our European commitments, will necessarily involve efforts from the State itself. The objective is indeed: 3% public deficit in 2029”, he added.
“Significant savings” to be made
“This constraint presents itself now: growth forecasts, in particular following the crisis resulting from the vote on the motion of censure, have all been revised downwards,” recalled the Prime Minister.
“We do not want to ignore these warnings,” asserted François Bayrou.
French growth will therefore initially be hampered by “significant savings”. “And for the future, it is indeed a powerful movement to reform public action that must be led,” said François Bayrou. “We will have to find methods of organizing the State which will not require an increase in our public spending. We must rethink all our budgets, not based on the continuation of what was done the previous year increased by 'a percentage of inflation, but of what the service or action to be carried out requires.'
In December, the Banque de France lowered its GDP growth forecast for 2025 by 0.3 points, from 1.2% to 0.9%, emphasizing that the economic context remained subject to “double uncertainty”, on nationally and internationally.
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