Bank of France Cuts 2025 Growth Forecast to 0.7%, Citing Global Uncertainty

The revised projection raises concerns over France's ability to meet its deficit reduction target and manage increased defense spending.

The Bank of France has lowered its 2025 GDP growth forecast from 0.9% to 0.7%, citing geopolitical instability and economic uncertainty.
Key factors influencing the downgrade include U.S. trade policies under President Donald Trump and weakened global demand impacting exports and investments.
France's ability to reduce its public deficit to the target of 5.4% of GDP is now in question, with potential budget adjustments anticipated later this year.
Increased defense spending, aimed at reaching 3% of GDP, adds further pressure to fiscal planning, requiring an estimated €30 billion in additional funding.
Inflation in France is expected to decline to 1.3% in 2025, while unemployment is projected to remain steady at 7.8% through 2026.