Macroeconomic forecasts for 2025-2026: an extended period of uncertainty

An anxiety-inducing economic environment and a record levels for the French savings rate in the first half of 2025

In the first half of 2025, and in addition to prevailing geopolitical risks, France’s economic environment was hit by the unpredictability of US government policy and challenges to the principle of free trade. These protectionist measures have also had lasting systemic effects, including a decline in oil prices and a fall in the value of the dollar, and even early signs of an upheaval in the global monetary order. Despite inflation being kept under control in advanced economies, especially in the eurozone, the global economy has been marked by increased volatility, with an initial upturn in activity resulting from anticipation of US tariff increases.

18.8% Household savings rate in the first quarter of 2025, a 45-year record.

In France, the economy lacked the momentum it needs to pull out of the doldrums. Unlike its European neighbors, it failed to take advantage of the temporary trade rush to the United States. One notable statistic is the household savings rate which, before declining slightly, reached a peak (if the health crisis period is excluded) of 18.8% in the first quarter, a level unequalled for the past 45 years. However, economic growth stood at +0.5% at the end of the second quarter, thanks exclusively to the contribution of inventories.

A divergence in monetary policy between the Fed and the ECB

Monetary policies on both sides of the Atlantic diverged in an unusual way, with disinflation certainly much more advanced in Europe than in the United States. Unlike the Fed (US central bank), the European Central Bank (ECB) pursued its monetary easing strategy. Despite the generally downward trend in inflation, and even the specific decline in the ECB’s key interest rates, 10-year rates have remained at a fairly high level. They even rose sharply during periods of concern, such as the announcement of Germany’s mega-stimulus plan in early March.

Major uncertainties limiting activity in the second half of 2025 and in 2026

The geopolitical fog related to the trade war is not expected to clear in the second half of 2025 and, looking forward, in 2026. The proposed scenario assumes French GDP growth of +0.6% in 2025 and +1.0% in 2026, after +1.1% in 2024. Assuming a reduction in political and fiscal uncertainties and an easing in trade tensions, France’s economic environment in 2026 should benefit from the improvement in the global and European economic context, the impact of the German recovery in defense and infrastructure investment, low inflation and oil prices, lower ECB interest rates, and a fiscal consolidation process that still remains unfinished.

0,6% The French GDP growth rate estimated by BPCE for 2025.

The ECB is expected to cut the deposit facility rate by a further 25 basis points in September, below the neutral rate. The central bank could lower it again to 1.5% on December 18, and maintain it at that level in 2026 in order to curb the appreciation of the euro. The 10-year OAT would average around 3.35% in 2025, then 3.65% in 2026, with a spread of 70 bp under the constraint of a risk of deterioration in French public debt.