The governor of the Bank of France (BdF) said this Wednesday, 10, that the economy “is holding up better than could be feared” and that in the coming days they will revise growth forecasts for this year and 2026 upwards.
In an interview with Europe 1 radio and the CNews channel, François Villeroy de Galhau highlighted that they now anticipate growth of 0.2% in the fourth quarter, after the 0.1% recorded in the first, 0.3% in the second and 0.5% in the third.
From then on, he said that both the projection that the BdF had for 2025, of 0.7%, and for 2026, of 0.9%, would be revised upwards, although the figures were not specified.
The Government revised upwards the forecast for 2025, which was 0.7%, to “at least 0.8%”, recalled today the Minister of Economy, Roland Lescure, in another interview with RTL radio, in which he highlighted the need to take advantage of this momentum to make efforts to reduce the public deficit.
Roland Lescure insisted that it is “essential” that the Budget for 2025, which is being debated in Parliament, proceeds with a deficit of 5% of Gross Domestic Product (GDP) “and not above that”.
On Tuesday, the French Government achieved some relief with the approval, in the National Assembly, of the Social Security budget, avoiding, at least for now, a new political crisis.
The text approved by the deputies (with a difference of just 13 votes) foresees a Social Security deficit of 19,500 million euros, a result that also implies the commitment of the State to make an injection of 4,500 million, indicated Roland Lescure, adding that this means that, in the State Budget, “efforts will be necessary”.
The governor of the BdF, for his part, considered that for France to fulfill the European commitment to reduce the deficit to 3% of GDP in 2029, in 2026 a quarter of the total effort will have to be made, which should translate into a deficit of 4.8%, lower than predicted by the Government.
For François Villeroy de Galhau, this deficit reduction next year “is very important to regain confidence”, because France is “the last bandwagon in Europe in terms of interest rates”.
The reference concerns the increase, in recent months, in the French risk premium, fueled by the political crisis triggered by early legislative elections in the summer of 2024, which resulted in an extremely fragmented National Assembly.
The governor of the BdF recalled that, according to his calculations, political uncertainty in France cost the economy at least 0.2% of growth, equivalent to around 6,000 million euros, to which must be added the effect of international crises, which removed a further 0.3%.