The OECD announces growth in France a little higher than expected in 2024

This is good news for the French economy. The OECD slightly raised its growth forecast for 2024 in France on Thursday, increasing it to 0.7% compared to 0.6% announced in February, while warning that “new budgetary consolidation measures would be necessary”. According to economic forecasts from the Organization for Economic Co-operation and Development published on Thursday, in 2024, public consumption and investment are expected to slow down under the effect of budgetary austerity measures.

News which corroborates the forecasts of the Minister of the Economy, Bruno Le Maire. “I have been saying for weeks that we will have growth, with a solid year 2024,” he boasted this Thursday on BFMTV. “France is in the right direction,” he assures, before pointing out “the permanent pessimism” of some. “What is this state of mind,” says Bruno Le Maire on the television set.

Furthermore, at the start of the year, “under the effect of the slowdown in economic activity, employment lost its strength and the unemployment rate increased slightly, reaching 7.4% in February 2024”, argues the OECD. But private consumption should strengthen under the effect of falling inflation, estimates this quarterly report. “The general stability of commodity prices will allow inflation to continue to decline,” he continues.

Consequently, after GDP growth of 0.9% in 2023 then 0.7% this year, a rebound is expected to 1.3% in 2025 (compared to 1.2% announced in February). A progression almost identical to that of Italy (where GDP is expected to grow by 0.7% in 2024 and 1.2% in 2025), but higher than Germany (with growth estimated at 0.2% in 2024, before 1.1% in 2025). The OECD warns of several risks, including the resurgence of geopolitical tensions. It also highlights the weight of public debt, at nearly 111% of GDP at the end of 2023.

Under these conditions, and while the rating agencies Fitch and Moody's left France's sovereign ratings unchanged at the end of April, “a medium-term budgetary plan is necessary to establish a trajectory for budgetary consolidation,” argues the organization. At the start of the year, the executive canceled by decree ten billion euros of credits, in areas ranging from ecology to development aid, including higher education. Bercy then announced the quest for 10 billion additional savings this year. An announcement “welcome, but additional budgetary consolidation efforts will be essential to resolutely reduce the debt, in particular by restricting the wage bill of public administrations and rationalizing social, health and tax expenditure”, argues the OECD report .