Following heavy rain in Paris on October 17, 2024, pedestrians cross the flooded street.
Joel Saget | AFP | Getty Image
The flash data was indicated on Thursday that the French economy had shrunk slightly in the fourth quarter, emphasizing the urgent need for French members to overcome the difference and agree to the 2025 budget.
The economy recorded 0.1 % in the fourth quarter in the last three months. Insee, a national statistical bureau, has revealed that it has fallen from 0.4 % in the third quarter of 2024.
France’s troubled economy has been boosted by the Olympic Games held in Paris last summer, but since then, the political drastic change has continued, that is, a fiscal task, that is, a large budget deficit and debt of the French budget. Increase -is not solved.
Political stagnation has suffered from Paris since the parliamentary election was held in June and July last year. Both the left end and the far right worked well in each voting round, promoting the Ranging of the Diet for who should govern. Eventually, President Emmanuel Macron set up a conservative government in September and alienated politics on the left and right.
At the time, the central government of Michel Barnier, who rely on the far right support, was vulnerable to the issues of both political spectrums, and after the budget plan for 2025, which reduces his deficit, was rejected. The government was expelled due to disagreement. Vote in December.
Thanks to the new government under Prime Minister François Bileo, both the far -right national rally and the socialist parties refused to support the motion, and he brought it by the left wing early in January. I survived my trust vote.
However, the budget for 2025 has not been passed yet, and Bayrou has resumed the troublesome discussions on pension reform, and to gain the support of the financial plan to gain the support of the financial plan by agreeing to excess expenditures and employment in health. It is forced to make concessions. And the education department.
According to analysts, Bayrou’s government is likely to get a budget for 2025 through parliament, but this week is approaching.
“The possibility that François Bileo would pass the reduction budget in 2025 has been greatly enhanced thanks to a series of political and financial concessions to socialists in the Diet,” Mujitaba Rerman, Managing Director, said he had commented by email on Monday.
“(He) is a good position to solve the short -term crisis in France by the end of next month or by early March,” said Rerman.
However, the support of socialist transactions is not solid, but the budget discussion seems to collapse on Wednesday. This is because the Central Left Party’s staff paused to participate in the protest against the immigration’s remarks on the immigration.
Even if the lecture is a resume, the government may not be able to reach 5.4 % of the fiscal deficit goals. The Ministry of Finance anticipates that the budget deficit will be 6.1 % of GDP in 2024.
“I believe that he is likely to succeed, but the final budget text may not even have a 5.4 % of the Ambition of this year’s GDP deficit,” says Rahman. 。
Regarding France’s growth prospects, economists warn the rigorous prospects for 2025.
“In our opinion, French political uncertainty will have a negative impact on future quarter activities,” said Rafael Brungalerle, Senior Economist of JP Morgan, commented on Thursday. I said.
“In addition, it is assumed that the uncertainty of trade will pressure on this year’s business sentiment. As a result, we expect France’s GDP to expand to 2025 (0.5 %). These uncertainty. How the sex channel develops and the impact on his activities remains uncertain.
Charlotte de Montpellier, an advanced economist in ING’s France and Switzerland, said, “The end of 2024 due to the GDP contraction in 2024 means that the carryover effect in 2025 is weak, and the government reached 2025. 0.9 % GDP growth is very difficult in the first quarter.
“The uncertainty about the budget of 2025 and the possibility of the decline in the Bailue government continue to compare domestic demand, which is likely to last in the next few months,” she added.
“The budget for 2025 has not been voted yet, and many uncertainty this year remains beyond the fiscal policy, but the need to reduce the public deficit that reached 6.1 % of GDP in 2024. ING’s economist is proportional to GDP growth. 。
