France lags behind other European countries in economic growth rates — Insee

France’s economy is lagging behind the rest of Europe, with sluggish growth across all sectors. The outlook is further clouded by rising uncertainty over planned budget cuts, according to data from the national statistics agency Insee.

The organization predicts France’s GDP to expand by a modest 0.6% in 2025, dipping below the eurozone average for the first time in three years. After a meager 0.1% increase in the first quarter, the economy is expected to grow by 0.2% in each of the next three quarters.

While France recorded the strongest GDP growth in Europe between 2023 and 2024, it now faces mounting challenges from productivity declines. These difficulties come amid trade disputes, rising defense spending, and escalating Middle East tensions, according to Insee.

Meanwhile, French households remain cautious with their expenditures despite relatively stable purchasing power, the statistics agency notes. Their savings rate has hit a 45-year high, surpassing all previous records except for a brief pandemic-era spike.