French Central Bank Cuts Growth Forecasts Amid Trade Tension Concerns

The Bank of France has lowered its economic growth forecasts for the French economy, citing concerns that global trade tensions will negatively impact French exports. The central bank's "Macroeconomic Interim Projections March 2025" report revised the 2024 growth forecast from 0.9% to 0.7%. This revision reflects worries that trade disputes will dampen demand for French goods. The bank noted that uncertainties surrounding potential tariff measures by the U.S. government contribute to this outlook. While France's exports may be less vulnerable than some EU countries due to lower dependence on the U.S. market, the overall risks to economic growth are tilted to the downside. The bank expects slower growth in 2025 due to global economic uncertainty, reducing the 2026 forecast to 1.2% from 1.3%. Inflation is projected to remain below the ECB's 2% target over the next three years, with forecasts of 1.3% in 2024, 1.6% in 2026, and 1.9% in 2027.