The French economy runs out of steam and should experience a brake in 2025, according to INSEE

The National Institute of Statistics provides for growth of 0.6% over the entire year. It is little for the second economy in the euro zone, which wins in relation to its neighbors.

After a growth already not very flourishing of 1.1% in 2024, our gross domestic product (GDP), the national wealth produced by our economy, should only increase by 0.6% over the whole of 2025. This is indicated by INSEE, the National Institute of Statistics, Wednesday, June 18, in its latest forecasts. Knowing that our annual overall GDP is today around 2,800 billion euros, 0.6% increase means roughly a wealth gain close to 18 billion. Suffice to say rather weak for the second economy in the euro zone after Germany, even if this 0.6% growth allows us to avoid the recession itself.

The government is slightly more optimistic with a 0.7%forecast, which remains weak. While in 2023 and 2024, we had rather resistant than our neighbors, our different engines are stalling. First household consumption (+0.7% in 2025 against 1% in 2024). The purchasing power continues to progress, but less strongly despite limited inflation. And then the investment of companies is also struggling. INSEE provides for a degradation of 0.5% for 2025.

France wins in the euro zone. It is a slow, but progressive degradation of our economy vis-à-vis our neighbors, which are also faced with the gloomy context of the international economy. Some continue to benefit from good exports like Germany. As for Italy, it seriously goes up the slope. The country led by the very conservative Giorgia Meloni sanitizes his finances. The Italian public deficit was 8.6%of GDP in 2022, it is now 3.4%, much less than in France which still displays a public deficit close to 6%.

This really weighs on our economy. In the very degraded budgetary context, all actors, at all levels, await a tightening of screws on the part of the government and freeze any initiative. This situation creates wait -and -see, both from households in terms of consumption and businesses in terms of investments. Our economy is amorphous. At the same time, for the same precautionary reasons, the French savings rate remains very high (around 18% of our available income), mainly maintained by retirees.

Regardless of international tensions, the public deficit, accompanied by the over -indebtedness of the State and the uncertainties they lead, is indeed one of the main causes of the lethargy of the French economy which is found in the last forecasts of INSEE for this year 2025.