According to the Insee’s forecasts, France’s GDP growth is expected to not exceed 0.2% during the first two quarters of 2025, and the unemployment rate could rise from 7.4% to 7.6%

In its economic outlook published on December 17, Insee announced that it expects no growth for the fourth quarter of 2024. “The indicators from household and business surveys suggest a gloomy outlook,” said the head of the Insee’s economic department, while emphasizing that a turnaround is possible if economic confidence quickly recovers.

The report, titled “Activity Suspended to a Revival of Confidence,” also forecasts a “growth carryover” of 0.5% by the end of June, meaning the potential annual growth if the GDP does not change by the end of the year.

Regarding unemployment, Insee anticipates a slight rise to 7.6% of the active population by mid-2025, due to insufficient job creation to absorb the increasing active population. This trend would be further exacerbated by the effects of pension reform, which will continue to increase the active population during the fourth quarter of 2024 and the first half of 2025.

Insee specifies that its forecasts do not account for the potentially uncertain effects of the RSA reform, which will automatically register an additional 1.2 million beneficiaries into the France Travail program starting January 1. Finally, the institute highlights that the political situation and its budgetary implications remain a major uncertainty and assumes that taxes and public services will remain unchanged in 2025, in line with the decisions made in 2024.