The French economy is progressing steadily but without strong internal momentum, according to the Bank of France's latest projections. GDP growth is forecast at 0.9% for 2025 and 1.0% for 2026, primarily driven by household consumption. Inflation is expected to remain below the ECB's 2% target through 2027 before approaching it in 2028.
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Household purchasing power is set to grow moderately, supported by rising real wages, while consumer investment in housing is projected to recover gradually following a decline in 2024. Business investment remains uneven, with strong growth in digital services and IT, contrasted by weaker activity in construction and certain industrial sectors.
Employment levels are stable, though the labour market no longer acts as a growth engine, with the unemployment rate expected to rise slightly to 7.8% in 2026 before easing to 7.4% in 2028. Corporate profit margins are forecast to remain stable in 2026 and 2027, reflecting tax adjustments and operational pressures.
The Bank of France emphasises that fiscal and budgetary uncertainty is limiting both household spending and business investment. For retailers and brands, consumer confidence will be a decisive factor, signalling that market strategy must focus on managing demand rather than relying solely on price incentives.
Source: www.neomag.fr
