In France, growth is expected to slow but remain resilient by the end of the year.

According to the monthly business survey conducted from November 26 to December 3 by the central bank among approximately 8.500 companies, activity increased significantly last month in industry, but the increase was more moderate in construction and market services.

"Month after month, activity remains resilient," despite the uncertainties affecting business morale since the dissolution of the National Assembly in June 2024, stressed the Bank of France's chief economist, Olivier Garnier, to the press.

A negative contingency hangs over the end of the year, after Airbus announced in early December that it would deliver fewer aircraft than planned in 2025 due to a quality problem on fuselage panels of its flagship aircraft, the A320.

"Even though it is a single company, we know that Airbus has significant macroeconomic effects" on both stocks and foreign trade, two of the components of GDP, the third driver of which is domestic demand, Mr. Garnier recalled.

Especially since the rather favorable development in the industry over the past six months has been "quite a bit driven by the defense, aeronautics and nuclear sectors", he added.

However, this should not prevent France from achieving at least 0,8% growth this year, as announced on Sunday by the Minister of the Economy, Roland Lescure, whereas the government had previously been counting on a 0,7% increase in GDP in 2025.

In September, INSEE had already raised its 2025 growth forecast for France to 0,8%, while stressing the fragility of the economic drivers against a backdrop of political crisis affecting household confidence and consumption.

According to the detailed third-quarter growth figures published at the end of November by the National Institute of Statistics (Insee), the carry-over growth for 2025 at the end of September --that is, the GDP growth if the last quarter's growth was zero-- had already reached 0,8%.

The Bank of France will raise its growth forecast for 2025 and 2026

The Bank of France will raise its growth forecast for this year and for next year, Governor François Villeroy de Galhau told Europe 1 on Wednesday.

When the publication is scheduled for December 19, "we will raise our growth forecast a little for this year and for next year. We were at 0,7% for this year, at 0,9% for next year," he indicated, adding that he could not yet give figures.

The Bank of France, however, forecasts a slowdown in growth in the fourth quarter to 0,2% of gross domestic product (GDP), compared to 0,5% in the previous quarter, it indicated on Thursday.

"Obviously, even if we were to reach 1% (growth next year, editor's note), it is not enough. It is resilient, but not sufficient," according to the governor.

"The economy and activity are holding up despite this political uncertainty," the governor said, recalling that a year ago "many feared a recession," which was avoided.

"There is a fairly convergent estimate which says that in total, national plus international uncertainty costs us about 0,5 points of growth (...) and that the national share of that is at least 0,2. So, if we were able to get out of this with a fiscal strategy and political stabilization, we can hope to gain 0,2%," according to the governor.

The vote on the social security budget on Tuesday "I simply note that it is a step taken", "it is by no means the end of this road", insisted Mr. Villeroy de Galhau.

Members of Parliament narrowly adopted the draft social security budget for 2026 on Tuesday.

Discussions on the state budget will continue in January if the Senate and the Assembly fail to reach an agreement, government spokeswoman Maud Bregeon announced on Wednesday, effectively ruling out the use of Article 49.3 to pass the text without a vote.

"To reduce the overall deficit sufficiently"

The Governor of the Bank of France also reminded everyone on Wednesday that "we do not know today whether we will be able to reduce the total deficit sufficiently".

"We start from 5,4% of GDP, the weight of our economy, for this total deficit. We need to be at 3% in four years (...) So, if we have to make this journey in four years, we have to make a quarter of the journey in the first year. That's why I argued for a deficit of 4,8% next year."

The governor "believes it remains very important to be as close as possible to this 4,8% figure", both "to get out of the progressive suffocation by debt, because debt interest is increasingly taking up our room for maneuver", and then "to restore confidence".

Economy and Finance Minister Roland Lescure said on RTL on Wednesday that he still hopes the public deficit (state, social security and local authorities combined) will be at "5% (of GDP) and not above" in 2026.

This implies that the State will replenish the Social Security coffers with 4,5 billion euros after the vote on the Social Security financing bill, which will worsen the Social Security deficit compared to the government's initial plan.

Mr. Lescure believes that the vote the day before on the Social Security budget, with a heavier deficit, made it "raise a notch" the difficulty of obtaining a vote on the State budget, which will have to compensate.

Illustrative image of the article via Depositphotos.com.