Growth: INSEE tempers government ambitions

The government had set an ambitious 0.9% growth target for 2024. However, achieving this goal may prove challenging, according to the latest forecasts published by INSEE on Thursday.

In its economic outlook report dated March 18, the National Institute of Statistics and Economic Studies predicts modest growth of 0.1% in the first quarter, followed by 0.2% in the second quarter. This slowdown is attributed to an uncertain international context and mounting economic pressures.

A challenging global environment

Under the telling title “Global Disorder, Sluggish Growth”, INSEE describes a French economy still struggling to gain momentum. The institute highlights that consumer spending remains the main driver of activity, but other factors are holding back growth:

• International uncertainty, particularly the looming threat of higher U.S. tariffs.
• Budgetary constraints: public spending, which had sustained growth over the past two years, is now slowing.
• Weak corporate investment, which weighs on economic momentum.

A difficult target to reach

INSEE also anticipates an increase in the unemployment rate to 7.6% by June, reinforcing the sense of economic uncertainty. To achieve the 0.9% growth target set by the government, several favorable conditions would need to materialize quickly: stable tariffs, lower oil prices, or a significant drop in household savings.

It remains to be seen whether these factors will align in favor of the French economy in the coming months.