First-quarter growth, to be released on Wednesday, is expected to be disappointing

The National Institute of Statistics and the Bank of France are forecasting growth of 0,1% and 0,2% respectively from January to March.

Stéphane Auray, professor of economics at ENSAI (National School of Statistics and Information Analysis) and at Rennes School of Business, describes to AFP the reasons for what is undoubtedly a very lackluster growth this winter.

"The political situation in France has been very uncertain, and it is difficult to imagine any improvement in growth coming as a result of it," he said.

And the trade war launched by Donald Trump will "inevitably" have consequences for Europe, he adds, as the American president threatens the EU with tariff increases of at least 10%.

Discussions are underway to try to dissuade him, but "we are not going to hide the fact that we are still far from an agreement," Economy Minister Éric Lombard said in Washington on Thursday, on the sidelines of the spring meetings of the International Monetary Fund (IMF) and the World Bank.

"Reasonable"

Added to this are budgetary efforts to clean up public finances.

The government wants to bring the public deficit back below 3% of GDP by 2029, with 5,4% this year, after 5,8% last year.

This implies a total effort of 2025 billion euros by 50, in reduced spending and tax increases, from the various components of public finances: State, social security and local authorities, before another 40 billion next year.

"The public finance recovery measures implemented will affect the accounting situation of the various economic players," INSEE analyzed in March.

Among other measures targeting businesses, with a total value of 13 billion euros according to the Medef (French employers' association), they are particularly affected by a corporate tax surcharge, and the wealthiest individuals by a contribution worth two billion euros.

Moreover, after the censure of the Barnier government, it was not until mid-February that the Bayrou government's budget was promulgated.

From January until this date, public spending, under "special law," was frozen at last year's level: "six weeks where it was severely restricted, and this will clearly weigh on the evolution of GDP in the first quarter," observes Charlotte de Montpellier, economist at ING.

"Progressive repercussion"

After growth of 1,1% in 2024, this year's growth does not seem to be off to a good start, with a risk of a slight rise in unemployment.

The government has already revised downwards its annual growth forecast of 0,9%, currently aligning it with that of the Banque de France, i.e. 0,7%.

If the INSEE figures for the first half of the year were confirmed (0,1% in the first quarter and 0,2% in the second), sustained growth of 0,4% in each of the last two quarters would be required to achieve the government forecast.

The IMF, for its part, lowered its forecast by 0,2 points on Tuesday, to 0,6% for the year as a whole. Charlotte de Montpellier is predicting a growth rate of only 0,4%.

The economist, however, noted a pleasant surprise on Friday morning with a business climate indicator for April which lost only one point over the month, despite the hot and cold weather blown by Donald Trump on customs duties.

The industrial climate even rose by three points, confirming the resilience of industrial morale also observed in Germany.

However, according to Ms. de Montpellier, there is a risk of "a gradual impact of the new global context" in the coming months.