French economy: Four strengths and one weakness

The French economy is entering a new budgetary cycle that is likely to be as complicated as the previous one. However, the economy appears to be more robust than in 2024. Firstly, the productive sector is in better shape today in several key areas (notably aeronautics and agriculture), which is reflected in the growth figures. Secondly, the shadow of political uncertainty has not undermined the strengths of the French economy: business creation, the labour market, a balanced current account, the transmission of ECB rate cuts to the private sector and the improvement in private investment. However, a budgetary process that is completed quickly, without too much uncertainty, and that leads to consistent consolidation, with a return to a deficit of 3% of GDP by the end of the decade, remains a necessary condition for France to reap the maximum benefits.

The French economy enjoyed spring buds, with a good wheat harvest in May, a spectacular rise in aeronautical production from June onwards, a rebound in hiring and therefore net job creation in Q2, and a sharp increase in business creations. All this good news comes at a time when sentiment indicators, such as the business climate and, even more so, household confidence, still point to a lack of confidence. It is as if we are talking about two different countries.

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