France: stronger (growth) than you think

On May 28 th , 2025 , the INSEE published many data related to the French economy , including the yearly national accounts, public administration accounts, and detailed results of the first quarter 2025 national accounts. French GDP growth (working-days adjusted – wda ) has been slightly revised upwards for 2022 (+0.2 pp to 2.8%) and significantly revised upwards for 2023 (+0.5 pp to 1.6%), driven by a more favorable contribution from external trade. Growth for 2024 remains unchanged at 1.1%, although with a somewhat different composition. The public administration accounts confirmed the public deficit for 2024 at 5.8% of GDP , influenced both by negative surprises on major taxes and by public spending that is growing faster than GDP. Public debt, according to Maastricht criteria, stands at 113.2% at the end of 2024, up from 109.8% at the end of 2023. Our public deficit target for 2025 remains at 5.5% (government: 5.4%). French GDP growth has been confirmed at +0.1% for the first quarter of 2025 . Exports sharply declined (-1.8% Q/Q), suggesting that there was no "frontloading" to the United States before the “Liberation Day” . The growth carryover at the end of the first quarter is +0.3%, supporting our forecast of +0.6% for this year. For 2026, the upward revision of the contribution from external trade over recent years, combined with the European shift in defense, presents upside risks to our forecast of 1.0%. Inflation stood at 0.7% Y/Y in May for the Consumer Price Index (CPI), down from 0.9% in April. Service s inflation decreased to 2.1%, compared to 2.4% in April, with declines noted in transportation and communication services. Assuming overall stable oil prices, French inflation is expected to remain below 1% until the end of the year and will average 0.8% in 2025 .