Macroeconomic projections
Economic conditions

Macroeconomic projections – December 2024

Published on the 19th of December 2024

Mosaïques d'hexagones avec avec en fond des symboles de réseau et d'analyse

In order to contribute to the national and European economic debate, the Banque de France periodically publishes macroeconomic forecasts for France, constructed as part of the Eurosystem projection exercise and covering the current and two forthcoming years. Some of the publications also include an in-depth analysis of the results, along with focus articles on topics of interest.

  • Our new macroeconomic projections were finalised in an increasingly uncertain national and international context. This projection was drawn up on 27 November, i.e. prior to the no-confidence vote, using assumptions relating to public finances close to those of the draft Budget Act, leading to a significant reduction in the government deficit to 5% of GDP in 2025. However, less fiscal consolidation would not lead to more growth as the negative effect of heightened uncertainty on household and business demand would have the opposite effect.
     
  • Our baseline scenario remains that of an exit from inflation without a recession, with a recovery delayed until 2026 and 2027, when compared with our previous projections. Economic activity is expected to grow by 1.1% in 2024, driven mainly by foreign trade. Growth should remain positive in 2025 but decline slightly. In line with the expected recovery in demand from our European partners, growth should pick up in 2026 and 2027, essentially under the effect of lower inflation, and the loosening of monetary policy that will have taken place.
     
  • In 2024, headline inflation declined significantly and is expected to fall to an annual average of 2.4%. Over the projection horizon, inflation should stay below 2% for a lasting period. This slowdown in prices should be facilitated by a slowdown in food, energy and manufactured goods prices, while inflation in services should fall more slowly, thus accounting for a more gradual decline in core inflation towards 2%.
     
  • As expected, the labour market is starting to enter a transitional slowdown phase, concentrated in 2025. The unemployment rate should peak at below 8% in 2025 and 2026, before declining again as activity picks up.
     
  • In addition to domestic uncertainties, geopolitical uncertainties remain high, as do those weighing upon international trade. Our baseline scenario does not take into account the risk of trade tensions in the event of an increase in US customs duties, the effects of which are difficult to quantify (see Box). Overall, the risks relative to our projection are on the downside for growth, and to a lesser extent for inflation.

Updated on the 19th of December 2024