Overview
- The central bank now projects GDP growth of 0.9% in 2025 and about 1% in 2026, and estimates inflation at 0.9% for 2025.
- INSEE’s December outlook points to 0.9% growth in 2025 and a mid‑2026 carryover of roughly 1%, with activity seen rising 0.3% in each of the first two quarters of 2026.
- INSEE expects unemployment to edge up to 7.8% by mid‑2026 as the recovery transmits weakly to hiring, with reduced apprentice hiring aid likely removing about 64,000 jobs over a year.
- INSEE sees consumer prices quickening to around 1.5% year on year by June 2026, driven mainly by energy base effects and a possible food price rebound after this year’s trough.
- Budget negotiations for 2026 remain unresolved, with a special law to roll over tax rules under discussion, and ongoing political uncertainty continues to weigh on investment and hiring decisions; aerospace exports remain a key support.