Janice R. Andrews
France has revealed its 2025 budget with a strong focus on reducing the fiscal deficit through strategic revenue measures and spending controls. The budget, which received parliamentary approval on February 6, targets lowering the deficit from 6.1% of GDP in 2024 to 5% in 2025, while projecting economic growth of 1.1%.
The financial plan allocates €1.7 trillion ($1.8 trillion) to public expenditure, accounting for 56.8% of GDP. A comprehensive €60 billion recovery package combines €40 billion in spending reductions with €20 billion in temporary taxation. Strategic funding priorities include €31.1 billion for research and higher education, €16.8 billion for energy transition initiatives, and €1.6 billion for healthcare improvements.
Infrastructure development features prominently, with €2.7 billion dedicated to modernizing transportation networks, including metro expansions and railway upgrades. The energy sector will receive €4.6 billion, primarily targeting offshore wind farms, solar installations, and biogas projects. Water infrastructure will benefit from €1.1 billion in improvements.
However, France’s construction industry faces challenges in the near term, with declining housing permits, elevated interest rates, and investor uncertainty contributing to a projected 1.3% contraction in 2025. Recovery is expected from 2026-2029, with forecasted annual growth averaging 2.6%, driven by renewable energy expansion and nuclear reactor construction.
The budget reinforces France’s commitment to achieving carbon neutrality by 2050.
