Recently, the French Statistical Office released a series of economic data for the third quarter, indicating that although the French economy briefly entered a recovery phase, the recovery momentum in the second half of the year is not optimistic due to the impact of turbulent external environments and unstable internal political and economic factors. The interweaving of multiple structural issues such as debt, consumption, employment, and productivity may lead the French economy to fall into weakness and sluggishness again.

The data from the French Statistical Office shows that despite the Paris Olympics contributing 0.3 percentage points to economic growth, the economy only grew by 0.4% quarter-on-quarter in the third quarter. Due to the continued sluggishness of consumption and investment, the economic growth rate in the fourth quarter may even be a decrease of 0.1%, and the expected growth rate for the whole year of 2024 will be 1.1%, the same as last year. In specific areas, foreign trade performed better than domestic consumption during the quarter, with the aviation and shipbuilding industries performing well. Public expenditure, especially local government spending, has significantly boosted and has become the only source of domestic demand. In response, officials from the French Statistical Office stated that after a brief recovery in 2023, business investment has continued to slow down, especially after changes in the French political arena, with the business community taking a wait-and-see attitude. It is expected that by the end of this year, business investment will continue to be bleak due to the rise in credit costs, weak demand in the Eurozone, and domestic political uncertainty.

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The French Central Bank released a macroeconomic forecast report at the same time, with data generally consistent with the French Statistical Office and predicted that the economic growth rate of France in 2025 and 2026 will slightly rise to 1.2% and 1.5%, respectively. The French Central Bank believes that as inflation continues to slow down, household purchasing power will recover, and consumption will surpass foreign trade to become the main driving force of economic growth. Based on this, the French Central Bank expects that after the peak of 5.7% inflation rate in 2023, the inflation rate in France in 2024 will drop to 2.5% and will remain between 1.5% and 1.7% from 2025 to 2026, in line with the target range set by the European Central Bank. The Governor of the French Central Bank, Villeroy, stated that for some time in the future, the French economic growth rate will steadily maintain a level slightly above 1%, but there is no clear sign of steady recovery yet, and both households and businesses show a certain wait-and-see attitude, which is closely related to the current domestic politics and international environment instability. At the same time, the French Central Bank specifically warned that the long-term high deficit rate of public finance in France will still pose a threat to the economy. Villeroy pointed out that "the public deficit as a percentage of GDP should be reduced to below 3% as soon as possible. The French government hopes to achieve this goal within three years, but this is not realistic and will severely damage economic growth."

Faced with the reality of the French economic recovery's re-ignition weakness, the French economic community calls on the government to re-empower the vitality of France's economic growth with sustainable public finance, stable expectations, and competitive production as the three key words, to break free from the "recovery - weakness - stagnation" idle trap.

In terms of public finance, the budget document recently submitted by the French Ministry of Economy and Finance to the National Assembly shows that due to the surge in temporary local expenditures in France and national income lower than expected, the public deficit as a percentage of GDP in France in 2024 may reach 5.6%, and even surge to 6.2% in 2025. Previously, France had been initiated by the EU for an "excessive deficit" investigation procedure and was ordered to submit a fiscal consolidation plan to the EU before September 20 to ensure that the public deficit's GDP share is controlled within 3% before 2027. In response, the French government has applied to the European Commission for a delay in submitting the relevant plan, hoping to ensure that the fiscal consolidation plan is consistent with France's 2025 fiscal budget bill. Previously, the French government announced a reduction of 25 billion euros in public expenditure in 2024, but only 10 billion euros of reduction measures were implemented before the early parliamentary election. In response, Le Maire, who just stepped down as the French Minister of Economy and Finance, urgently called for attention to the increasingly severe situation of France's fiscal deterioration, emphasizing that "only reducing expenditure is a wise move, and any other measures will inevitably plunge France into a fiscal predicament." Le Maire also suggested that increasing wages and labor productivity, addressing climate change, and promoting capital markets and private finance to help economic development should be the top three fiscal priorities for the future.

In terms of stable expectations, compared to actively intervening in the uncertain external environment, it is wiser to rebuild internal stable policy expectations and consolidate the resilience of economic recovery as soon as possible. A recent opinion poll conducted by French media and the Montaigne Institute shows that in the face of serious divisions and games on fiscal issues among French political parties, public anxiety continues to rise, with about 80% of French people believing that "solving the debt problem is urgent." At the same time, the economic survey report from the French Statistical Office shows that it is expected that by the end of this year, the monetary easing policy adopted by the government will still not be effective. Although it has promoted wage increases, increased social welfare, and eased inflation, the public remains cautious and worried about consumption and investment, with household savings levels remaining high, weakening the supporting role of consumption in economic growth. Faced with the continuous difficulty in forming a new cabinet by the French Prime Minister and the continuous tug-of-war among various parties on reducing national, local, and social expenditures, increasing taxes on the wealthy and large enterprises, and promoting ecological transformation plans to reduce deficits and promote development paths, market and public expectations for government policy uncertainty will only increase, forming a huge constraint on the continuous and stable development of the economy.

In terms of competitive production, facing a series of difficulties such as declining overseas demand, reduced new orders, and excess industrial capacity, the vitality and competitiveness of French industrial production continue to be suppressed. Looking at the performance of French companies in the world's top 500 in recent years, the number of listed companies has continued to decline, mainly concentrated in the tertiary industries such as finance, insurance, consumer entertainment, and retail, while traditional advantage industries such as heavy industry, electrical industry, and nuclear industry have few listed companies. According to relevant surveys, more than two-thirds of respondents believe that inflation factors are continuously affecting the willingness and ability to purchase "Made in France," and the proportion of French products in the overall consumption of the French public has decreased by 11 percentage points in 50 years, with finished products dropping from 82% to 38%. More French families are cautious about spending and prefer to choose imported high-quality and low-priced goods. In response, some French economists believe that this phenomenon is related to the decline in domestic demand and purchasing power on the one hand, and on the other hand, it is related to the rise in production costs faced by enterprises, increased employee costs, declining profit margins, and weak willingness to innovate and transform, which will continue to restrict France's competitiveness. In response, some French think tank experts have proposed that in the face of external shocks such as energy crises and fierce competition, simply implementing trade protectionist measures will not solve the problem but will mean higher costs and worse effects. It is necessary to improve productivity from the perspective of reshaping the tax environment, optimizing human resources, and promoting technological innovation.

In any case, facing the continuous weakness of economic recovery, stable policies, revitalizing expectations, and strengthening the core are the key moves to break the structural shackles, and how to effectively balance the relationships between reducing deficits and stimulating, production and people's livelihoods, transformation and development, reform and stability is also a major problem that France needs to solve.