By Taken together, this data confirms our scenario of a French economy that stagnated throughout the first quarter, before beginning a gradual recovery in the second.
Falling inflation, a still-tight labour market, rising consumer confidence and lower interest rates should enable domestic demand to pick up gradually over the coming months. After an expected 0% in the first quarter, GDP could grow by 0.2% quarter-on-quarter in the second and accelerate further in the second half of the year. However, there are risks surrounding this forecast.
Despite the expected acceleration over the course of the year, average GDP growth over the year will be weak due to the very weak start to the year, at around 0.5% compared with 0.9% in 2023. This is well below the French government’s forecast of 1% for 2024 as a whole, which was already revised downwards in February (the budget was drawn up on the basis of a GDP growth forecast of 1.4%). This means that the public deficit is once again likely to be well above target for 2024. As a result, fiscal policy is likely to become more restrictive over the coming months, which will weigh on the economic recovery. For 2025, GDP growth of 1.3% is expected.
