PARIS (Reuters) - France is set to see weak but steady economic growth through the first half of next year as a political drama over the 2025 budget weighs on consumers and businesses, the official
French Economic Growth Steady at 0.2% in First Half of 2025
PARIS (Reuters) - France is set to see weak but steady economic growth through the first half of next year as a political drama over the 2025 budget weighs on consumers and businesses, the official INSEE statistics agency said on Tuesday.
The euro zone's second-biggest economy is likely to have stagnated in the final three months of 2024 with a post-Olympics pullback in activity, INSEE said in its economic outlook.
That would leave France with full year 2024 growth of 1.1%, in line with the government's forecasts and unchanged from last year.
The economy would then eke out growth of 0.2% in both the first and second quarter of 2025, benefitting from a boost to exports from the delivery of an ocean liner in the first three months and then a slight pick-up in consumer spending.
France's volatile political situation is casting considerable clouds over the economic outlook as the country heads into next year without a new budget after opposition lawmakers voted out the previous government in a dispute over finances.
Temporary legislation rolling over 2024 spending and taxation limits is currently being rushed through parliament to avert a US-style shutdown in January until a more permanent budget can be voted on early in the new year.
"The uncertain political environment is likely to modify the behaviour of economic players, generating a wait-and-see attitude among both households and businesses alike," INSEE said in its outlook.
INSEE forecast that inflation would pick up from 1.3% in November to 1.5% in January as price increases for some health services and insurance take effect but ease back to 1.0% by mid-year after an expected fall in electricity prices in February.
(Reporting by Leigh Thomas; Editing by Kirsten Donovan)
