The last two motions of censure having been rejected in the National Assembly like the four previous ones, the Prime Minister is strengthened and France, for the first time since the dissolution of 2024, has a government with a certain stability and a budget that allows the State to function. On the economic front, INSEE has published the first estimate of GDP growth for 2025. With 0.9%, it is certainly far from having returned to the past rhythms but given the international context and the political instability in the country, this result is reassuring. However, it is insufficient to allow a recovery in the labour market. The number of jobseekers over one year rose by 6.8% to 3.35 million and the unemployment rate, which rose to 7.7%, remains lower than the record of 10% observed in the past, but this reversal of trend is worrying.
The financial markets were reassured. The interest rate on 10-year bonds fell to 3.43%, below those of the United States (4.24%), the United Kingdom (4.52%) and Italy (3.46%). The gap with Germany (2.84%) has narrowed and is even lower than the 60 basis points that constituted the structural level. France's public debt remains very high and its deficit in relation to GDP (5% forecast in 2026) will have to be reduced in the future. The measures to be adopted will then be one of the major issues of the next presidential election.
Growth was therefore maintained in 2025 despite a sharp slowdown in the 4th quarter (+0.2%) compared to the previous quarter). Household consumption grew little (+0.4%) and their investments only partially (+0.8%) offset the fall observed in 2024 (-5.4%). Only consumption expenditure by the State and general government grew significantly (+1.7%), which is not unrelated to the high level of public deficits. There was also no rebound in business investment (+0.1%) after the fall in 2024 (-2.4%).
Finally, over the year, the contribution of foreign trade to growth remains weak. The significant destocking in the aeronautics industry and shipbuilding in the second half of the year with deliveries of aircraft and cruise ships partly explains this weak result. The deficit in the energy balance is narrowing thanks to electricity exports, which will have reached a record level in 2025, close to €6 billion. On the other hand, trade in agricultural and agri-food products is barely balanced and the deficit in manufactured products will have been close to €40 billion in 2025, which shows that the discourse in favour of reindustrialisation has still not borne fruit.
The financial catastrophe so often predicted, caused by an excess of public debt has therefore not occurred and there is no sign that it will occur in the coming months. France, like the other countries in the euro zone, is benefiting from the mistrust of the dollar following the instability resulting from the multiple announcements of the White House. The choice of the future chairman of the Federal Reserve, Kevin Warsh, has been reassuring, but there is no guarantee that this appeasement will be lasting. France was therefore able to raise the necessary funds on the markets under good conditions to repay the debt that had matured and to finance last year's public deficits. But three characteristics of the French economy remain worrying and show that the satisfaction expressed by certain political parties is unjustified.
The first concerns the persistence of the trade deficit in manufactured goods. Trade in these goods was in large surplus until the early 2000s. Then the situation deteriorated sharply and a so-called supply-side policy was put in place from 2013 onwards, resulting in massive reductions in tax and social security contributions for companies. These measures were at the origin of the increase in deficits and public debt and did not achieve the desired objectives for a simple reason: they were neither targeted nor conditional on the implementation of the necessary investments.
The main beneficiaries of these reductions have been the financial and retail sectors. As for the companies subject to international competition, no compensation has been asked of them and many of them have engaged in investments abroad, most often in the form of acquisitions, which have sometimes proved disastrous. These transfers have also led to an increase in dividends and share buybacks, which have reached record levels for CAC 40 companies in recent years. The confirmation of the choice in favour of the reindustrialisation of the country will therefore have to be accompanied by a drastic revision of this policy.
The second weakness concerns the state of public finances. Even if this will not lead to a major crisis, as some claim, their recovery is an imperative. It involves two series of reforms. The first concerns a re-establishment of a better balance in the levies. It is not a question of taxing the rich or successful companies, but that everyone contributes to the financing of public spending in the amount of their income and wealth. The increase in inequality of all kinds, which has led to the rise of populist movements, must be slowed down by a return to fairer taxation, which will contribute in part to the recovery of the accounts.
The reduction in public spending will come from a process that is necessarily slow in the debureaucratization of the country, but which is politically assumed and guaranteed in the long term. The continuous reduction in the operating costs of the administrations and the simplification of the territorial millefeuille with the questioning of the reform of the regions will have to be priorities for the next governments. Rather than announcing brutal cuts that provoke social movements, it is better to act continuously and with determination. The country will benefit doubly. The budgetary situation will improve and companies and individuals alike will see their production costs fall and their daily lives simplified.
The third weakness concerns the sharp fall in housing construction over the past twenty years. Housing starts fell from 420,000 to 274,000 per year, a decrease of 30%. The government has finally become aware of the extent of the phenomenon, but without proposing a solution. There are many causes. Institutional investors, and in particular insurance companies, had to withdraw from the market to comply with the new solvency regulations. Budget cuts have prevented social housing builders from taking over.
The ageing of the population and the rise in inequality have reduced the number of households likely to buy a home. The oldest, who are often the wealthiest, are already homeowners and the others have less and less means to buy. The attractiveness of real estate investment has also decreased in relation to financial savings and is mainly hampered, again by an increasingly burdensome regulatory environment for landlords. The growth in the number of second homes has also been a factor in price increases that has helped to deter potential buyers or investors. To reduce these tensions and revive construction, a reform of real estate taxation concerning second homes and vacant housing is essential.
France is doing better than people say, but not as well as it should be. It will be up to the next president to formulate proposals and to have them implemented to remedy them.