INSEE Predicts French Economy to Grow 0.8% in 2025 Amid Sectoral Improvements
France’s economy is expected to expand by 0.8% in 2025, supported by improvements in key sectors such as aerospace, tourism, real estate, and agriculture, according to the national statistics agency INSEE. The forecast, released on Thursday, suggests a slightly faster growth than previously anticipated, as these gains help offset weak consumer spending and sluggish business investment.
The outlook offers a rare piece of positive news for the eurozone’s second-largest economy, where renewed political uncertainty has shifted the focus of rating agencies and investors toward France’s high public debt.
However, INSEE cautioned that the projected growth is being driven more by companies rebuilding inventories following two years of decline than by consumer demand—the usual engine of economic activity.
The agency now estimates that France’s economy will grow by 0.8% this year, down from 1.1% in 2024 but above earlier projections of 0.6%. The forecast also exceeds the government’s target of 0.7%, which is expected to be updated in the coming days as part of preparations for the 2026 budget.
On a quarterly basis, INSEE expects the economy to expand by 0.3% in the third quarter and 0.2% in the final quarter compared with the previous three months.
Nonetheless, the agency warned that political uncertainty—following the fall of former Prime Minister François Bayrou’s minority government after a no-confidence vote on Monday—could weigh heavily on economic activity if it persists.
For instance, consumers are already choosing to save their extra cash rather than spend it, despite benefits from lower inflation, which is projected to average just 1% this year.
Concerns over unemployment—the highest in the past decade since the COVID period—are also influencing household spending decisions. Even so, INSEE expects the unemployment rate to rise only slightly, reaching 7.6% by the end of the year.
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