France’s GDP growth forecast lowered due to trade tensions

France’s GDP is expected to grow at a still moderate rate in the first half of 2095 before gathering pace in the second half of the year

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France's central bank, Banque de France (BdF), announced on Wednesday that it has lowered the gross domestic product (GDP) growth forecast to 0.7% for the whole year of 2025.

After the slight downturn in activity observed at the end of 2024, France's GDP is expected to grow at a still moderate rate in the first half of 2025 before gathering pace in the second half of the year, the Banque de France said.

“Over 2025 as a whole, activity is expected to slow down but growth should remain positive, at an annual average rate of 0.7% (after 1.1% in 2024),” it added.

In the BdF’s previous estimations published in December 2024, it had predicted that the GDP growth in 2025 would be 1.1% in France.

The French Ministry of Economy announced today that the projected public deficit for 2025, initially estimated at 4.6% of the country’s GDP, will see a slight increase but will remain below the 5% threshold.

The ministry, alongside the Ministry of Finance and Public Accounts, stated that this adjustment will be factored into the preparation of the 2026 budget, which will soon be under discussion.

In October, France submitted its medium-term financial plan to the European Commission, outlining its commitment to reducing the public deficit to 2.8% by 2029, while maintaining the primary goal of bringing it below 3% in accordance with European fiscal rules.