In an interview with Europe 1 radio and CNews channel, François Villeroy de Galhau highlighted projections for a 0.2% growth in the fourth quarter, following 0.1% in the first, 0.3% in the second, and 0.5% in the third.
He also indicated upward revisions for the BdF’s 2025 and 2026 projections, initially set at 0.7% and 0.9% respectively, though he did not specify exact figures.
The government increased its 2025 forecast from 0.7% to “at least 0.8%,” as noted by Economy Minister Roland Lescure in an interview with RTL radio. He emphasized the need to use this momentum to reduce the public deficit.
Roland Lescure reiterated the importance of the 2025 budget, under parliamentary discussion, targeting a deficit of 5% of GDP, not to exceed this level.
On Tuesday, the French government gained some relief with the National Assembly’s approval of the social security budget, temporarily avoiding another political crisis.
The approved text, passed by 13 votes, anticipates a social security deficit of 19.5 billion euros, necessitating a state contribution of 4.5 billion, and highlights the need for further efforts in the State Budget, according to Roland Lescure.
The BdF governor noted that for France to meet its European commitment of reducing the deficit to 3% of GDP by 2029, a quarter of the total effort must be realized in 2026, aiming for a deficit of 4.8%, lower than the government’s projection.
François Villeroy de Galhau stressed the importance of next year’s deficit reduction to rebuild confidence, given France is the “last wagon in Europe regarding interest rates.”
This refers to the recent increase in France’s risk premium, fueled by political turmoil following the summer 2024 early legislative elections, resulting in a highly fragmented National Assembly.
The BdF governor mentioned that, based on his calculations, France’s political uncertainty cost the economy at least 0.2% growth, equivalent to about 6 billion euros, additionally affected by international crises, subtracting another 0.3%.
