INSEE forecasts “sluggish” growth and a rise in the unemployment rate for the start of 2025

French GDP growth should not exceed 0.2% in the first and second quarters of 2025, while the unemployment rate could rise from 7.4% to 7.6%.

French GDP growth should not exceed 0.2% in the first and second quarters of 2025, INSEE estimated Tuesday, December 17 in its economic report, which continues to forecast zero growth in the fourth quarter of 2024. “The signals emerging from household and business surveys paint a gloomy landscape”affirmed during a press conference the head of the economic department of the National Institute of Statistics, without excluding better results “if confidence returns quickly”.

The quarterly note, entitled “Activity suspended from a renewed confidence”thus glimpses a “growth assets”that is to say what the annual growth would be if GDP no longer evolved at all at the end of the year, by 0.5% at the end of June.

The unemployment rate in France should also rise from 7.4% currently to 7.6% of the active population by mid-2025, job creation being insufficient to compensate for the increase in the active population, writes INSEE. “In the fourth quarter of 2024 and the first half of 2025, mainly due to the effect of pension reform, the active population would continue to increase”specifies the institute. The deterioration of the economic situation should also push unemployment up.

INSEE specifies that its forecasts do not include the effects “uncertain” on the unemployment rate of the RSA reform, the generalization of which from January 1 will lead to the automatic registration of 1.2 million additional beneficiaries with France Travail. Finally, INSEE emphasizes that “the political situation and its budgetary consequences remain a source of unknowns”. L’institut a “assumes the renewal in 2025 of taxes according to the scales in force on the revenue side, and of services voted in 2024 on the expenditure side”.