IMF Executive Board Concludes 2025 Article IV Consultation with France

IMF News, July 14, 2025

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Real GDP grew by 1.1 percent in 2024, supported by the impact of the Paris Olympics and temporarily boosted services and consumption, despite rising household savings rates.
Real GDP projected growth:
- 2025: 0.6 percent
- 2026: 1.0 percent
- 2027: 1.2 percent
Drivers and risks:
- 2025 slowdown reflects trade tensions, weak growth in trading partners, market volatility, high uncertainty, and subdued external and domestic demand.
- Downside risks: deepening geoeconomic fragmentation and domestic policy uncertainty.
- Upside potential: easing trade tensions and renewed structural reform momentum that could support business and consumer confidence.
Inflation and labor market:
- Disinflationary process progressing well; CPI (year average) and GDP deflator indicators show decline.
- Labor market remains robust.

Fiscal stance in 2024 was expansionary due to lower-than-expected revenues, overruns in local governments and social security, and rising debt service payments.
General government balance (percent of GDP):
- 2022: -4.7
- 2023: -5.4
- 2024: -5.8
- 2025: -5.7
- 2026: -6.0
Revenue (percent of GDP): 53.7 (2022), 51.4 (2023), 51.9 (2024), 51.7 (2025), 51.5 (2026)
Expenditure (percent of GDP): 58.4 (2022), 56.8 (2023), 57.2 (2024), 57.3 (2025), 57.4 (2026), 57.5 (2027)
Primary balance (percent of GDP): -2.9 (2022), -3.7 (2023), -3.8 (2024), -3.4 (2025), -3.5 (2026)
Structural balance (percent of potential GDP): -4.2 (2022), -5.3 (2023), -5.2 (2024), -5.5 (2025)
General government gross debt (percent of GDP): 111.4 (2022), 109.6 (2023), 113.1 (2024), 116.5 (2025), 119.1 (2026), 121.5 (2027)
Executive Board view:
- Authorities’ medium-term fiscal adjustment is appropriate to place debt on a downward path.
- Urgent need to approve a credible and well-designed package of additional measures.
- Fiscal consolidation should prioritize rationalizing current spending with concerted action across central, local, and social security levels and include robust contingency plans.

IMF’s 2025 Financial Sector Assessment Program (FSAP) assessment: banking sector demonstrated resilience to recent shocks, maintaining healthy capital and liquidity buffers.
Executive Directors’ observations:
- Financial stability risks remain contained; system shows resilience under severe FSAP stress tests.
- Support for continued efforts to enhance risk analysis and improve data quality, notably on interconnectedness of financial institutions.
- Need to ensure supervisory authorities have adequate resources to meet evolving needs.
- Encouragement for financial institutions to integrate cyber and climate risks into strategy, governance, and risk management.

Directors emphasized the importance of raising productivity growth to sustain economic prospects and facilitate fiscal consolidation.
Recommended reform directions:
- Better target state aid and R&D spending.
- Enhance access to finance for productive firms.
- Reduce regulatory burden.
- Advance the EU Savings and Investments Union to support reforms.
Labor market and social policy recommendations:
- Promote employment and job quality to support digital and green transitions.
- Further social benefit reforms to enhance work incentives and reduce career fragmentation.
- Strengthen human capital, increase women’s labor force participation, and better integrate migrants into the labor market.

Current account (percent of GDP): -1.2 (2022), -1.0 (2023), 0.4 (2024), -0.5 (2025)
Trade balance of goods and services (percent of GDP): -2.6 (2022), -1.4 (2023), -0.7 (2024), -0.8 (2025)
Exports of goods and services (percent of GDP): 36.6 (2022), 34.3 (2023), 33.9 (2024), 33.7 (2025), 33.2 (2026), 33.0 (2027)
Imports of goods and services (percent of GDP): -39.2 (2022), -35.7 (2023), -34.0 (2024), -34.4 (2025), -33.7 (2026)
Official reserves (US$ billion): 100.4 (2022), 79.2 (2023), 78.4 (2024)
Exchange rate and competitiveness indicators:
- Euro per U.S. dollar, period average: 0.95 (2022), 0.92 (2023)
- NEER, ULC-styled (2005=100, +=appreciation): 95.9 (2022), 97.0 (2023), 97.3 (2024)
- REER, ULC-based (2005=100, +=appreciation): 90.7 (2022), 90.5 (2023), 91.7 (2024)

Unemployment rate (percent): 7.3 (2022), 7.4 (2023), 7.7 (2024), 7.5 (2025)
Employment and labor force: Employment change -0.3 (2022), 0.2 (2023); Labor force change 0.0 (2022)
Growth of credit to the private non-financial sector: 3.6 (year not specified)
Money market rate (Euro area): 0.3 (year not specified), 3.4 (year not specified)
Government bond yield, 10-year: 1.7 (year not specified), 3.0 (year not specified)

Executive Directors welcomed resilience of the economy, robust labor market, and declining inflation.
Emphasis on urgent need to strengthen public finances and pursue structural reforms amid significant domestic and external headwinds.
Board supported continued consensus-building to advance fiscal and structural reforms while ensuring fairness and equity.
It is expected that the next Article IV consultation with France will be held on the standard 12-month cycle.

Source: IMF press release, July 14, 2025.