France cuts its growth forecast for 2025 on tariff uncertainty
[PARIS] The French government has cut its growth forecast for 2025 because of the uncertainty over world trade, the economy minister said on Wednesday just hours after US President Donald Trump paused a massive hike in tariffs.
The government had forecast annual growth of 0.9 per cent when presenting its 2025 budget, but Economy Minister Eric Lombard told TF1 television that it would be trimmed to 0.7 per cent.
The Bank of France had already revised its growth forecast for 2025 to 0.7 per cent in March, and the French Economic Observatory (OFCE) lowered its forecast to 0.5 per cent on Wednesday.
Asked about a possible further downward revision, the minister said that “would depend on the negotiations that will be initiated with the United States and the decisions that are taken on customs duties.”
“If we succeed in lowering tariffs, we could even get better, and if not, we will see,” he added.
Lombard ruled out raising taxes in 2025.
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Just before his interview, Trump announced that he was suspending levvies on all countries except China for three months, after US bond and equity markets had tumbled for several days.
“It’s good news, but we must remain calm,” Lombard told LCI television, saying he hoped to find “a new agreement” with the Americans.
Bank of France governor Francois Villeroy de Galhau welcomed the US move which he called “a return to economic realism and a little reality”. But he warned that US policy remained “unpredictable” and that there would be a “negative impact” in Europe.
Italy, which exports much more to the US than France, earlier in the day halved its growth forecast for 2025 to 0.6 per cent. AFP
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