France's economy is now expected to grow by only 0.6 per cent in 2025, down from a previous forecast of 0.7 per cent, the Bank of France said on Wednesday, citing weaker foreign demand amid ongoing US trade tensions, according to Reuters. The eurozone's second-largest economy expanded 1.1 per cent last year, but rising tariff risks and economic uncertainty—particularly from US policy—have reduced growth prospects. The central bank estimates these trade frictions will shave 0.4 percentage points off GDP through 2027, with half that impact already reflected in current forecasts. Growth is seen picking up modestly to 1.0 per cent in 2026 and 1.2 per cent in 2027, but both figures are down from earlier projections. The bank expects domestic demand and inventory rebuilding to support activity this year, while foreign trade will remain a drag. Inflation forecasts were also revised lower. Harmonised consumer prices are expected to rise just 1.0 per cent in 2025, compared to 1.3 per cent previously, with further moderate increases to 1.4 per cent in 2026 and 1.8 per cent in 2027. Governor François Villeroy de Galhau said trade policy unpredictability is compounding the eurozone's long-standing growth challenges. Attribution: Reuters Subediting: M. S. Salama
