France’s economy stumbles in the fourth quarter of 2024 with the continuation of the political crisis

Flash data showed on Thursday that France’s economy shrunk a little in the fourth quarter, as it highlighted the urgent need for French legislators who are warring to overcome their differences and agree on the 2025 budget.

The economy recorded 0.1 % contraction in the fourth quarter in the previous three months, the country statistics agency revealed on Thursday, a decrease from 0.4 % in the third quarter of 2024. The economists included in Reuters had expected the growth to be flat.

The besieged economy in France obtained a batch of the Olympic Games in Paris last summer, but political turmoil followed this since then, leaving financial challenges – a large budget deficit in France and the growing debt stack – without a solution.

Political recession and economic uncertainty in Paris has fallen since the sudden parliamentary elections in June and July. The performance of both the far left and the extreme right was well in the voting rounds, which led to the Rangenste in the National Assembly about who should be ruled. In the end, President Emmanuel Macron installed a conservative government in September, which led to the alienation of political factions to the left and the right.

Depending on the extreme right to obtain support, the government of the then Minister, Michelle Barnier, was vulnerable to challenges from both sides of the political spectrum, and after rejecting the 2025 budget plans, the government was expelled in a state of confidence to vote in December.

A new government was placed during the era of Prime Minister Francois Bayro in December and thanks to both the right -wing national gathering and the Socialist Party, which refuses to support the proposal, They survived the confidence that brought the far left earlier in January.

However, the 2025 budget has not yet been passed, and Bayro has already been forced to make concessions to the left to mobilize its support for its financial plans, by reopening the spinal discussion on reforming pension and approving additional spending and creating jobs in health and educational sectors.

Analysts say that the Bayro government has a better opportunity to get the 2025 budget through Parliament, although the talks are close to collapse this week.

“The chances of Bayro to pass the deficit budget in 2025 have been greatly strengthened thanks to a series of political and financial privileges for the Socialists in the National Assembly,” said Mujtaba Al -Rahman, the administrative director of Europe at the Eurasia Group, in the comments via e -mail on Monday.

Rahman added: “(He) is now in a good position to solve the short -term budget crisis by France by the end of next month or early March.”

However, the support of the socialists of a deal is far from hardness, as budget discussions are considered close to the collapse on Wednesday as officials from the Center left party They commented their participation in the talks in protest against Bayro’s comments on immigration.

Even if the talks are resumed, the government may lack a 5.4 % deficit goal this year.

Al -Rahman said: “We believe that (Bayro) now has a good opportunity to succeed, but the final text of the budget may lack even its low ambition by 5.4 % of the gross domestic product deficit this year.”