France’s Political and Economic Challenges in 2025

As France enters 2025, political and economic uncertainty persists, marked by a budget deficit projected at 6.1% for 2024 and a debt level of 112% of GDP. Following a political crisis triggered by inconclusive snap parliamentary elections, President Emmanuel Macron established a new minority government facing the same challenges of garnering support for spending and taxation plans. Political fragmentation has led to concerns among financial markets, with Moody’s downgrading France’s credit rating. Macron acknowledged that his decision to dissolve parliament has increased instability. The economy is expected to stagnate in the coming winter, with forecasts predicting meager GDP growth of 0.6% in 2025. Analysts emphasize the political dynamics at play, suggesting that the government’s progress on budgetary issues will be slow as parties strategize for the next presidential election. Calls for early elections may intensify if the current government faces another confidence vote, particularly from far-left and far-right parties that see potential advantages in such a scenario.

Source: CNBC