Impacts on the French Economy
After French Prime Minister Lecornu resigned on Monday, centrist President Emmanuel Macron asked him to find a way forward with the opposition parties. The outgoing prime minister concluded that it is still possible to reach an agreement on the 2026 budget. President Macron will appoint a new prime minister in the next two days. This reduces the political uncertainty of potential elections. It may thus lower French risk premia in the near term. But the 2026 budget is still unfinished, and the necessary compromises could come at the cost of debt sustainability.
French Economy at a Glance
France boasts a diversified, highly developed economy that holds significant influence in the Eurozone and abroad. Banque de France is the country’s central bank, overseeing its monetary policy and public finances.
Gross Domestic Product
- Nominal GDP per capita, 2025: $49,920
- Nominal GDP ranking per capita, 2025: 25th
- Purchasing power parity (PPP)-adjusted GDP per capita, 2025: $66,980
- PPP-adjusted GDP ranking per capita, 2025: 25th
- GDP growth rate, 2025: 0.7%
Data from the International Monetary Fund (IMF).
Major Trading Partners & Memberships
- French import trading partners: Germany, Belgium, Netherlands, Italy, Spain, United Kingdom, United States, China
- French export trading partners: Germany, Spain, Italy, United States, Belgium, United Kingdom, Greece
- French memberships & forums: OECD, European Union (EU), WTO, G-20, G7
Consumption Expenditure
- General government final consumption expenditure, 2023: 23.1% of GDP
- Household consumption (private consumption) expenditure, December 2024: 54.3% of GDP
Data from the World Bank and CEIC Data.
2025 French Economic Outlook: Macroeconomic Developments & Trends
- Potential partial reversal or suspension of pension reforms (if 2026 budget agreed), which may include the current plan to raise the retirement age from 62 years to 64 years by 2030
- High interest rates and massive annual (re)financing leads to rising interest costs
- French government debt (public debt) and government spending is expected to increase, a lingering effect from the COVID-19 pandemic
- Continued uncertainty over U.S. tariffs on global financial markets and domestic sectors, including agri-food, luxury goods, and industrial sectors
- Growing labor force participation while unemployment rates remain relatively stable
- Energy prices generally expected to decrease over the long term
- Economic growth rate expected to lower slightly in 2025 compared to recent years before economic activity increasing in 2026
- Government subsidies will include increased focus on green energy
- Potential to continue leading foreign investments (FDI)
- Goods balances in foreign trade expected to remain in a deficit while services are expected to remain as a surplus
Disclaimer
Marketing communication / Non-Independent Research. This publication is issued by Coöperatieve Rabobank U.A., registered in Amsterdam, and/or any one or more of its affiliates and related bodies corporate (jointly and individually: “Rabobank”). Coöperatieve Rabobank U.A. is authorised and regulated by De Nederlandsche Bank and the Netherlands Authority for the Financial Markets. Read more