“ France’ s structural advantages, such as its skilled workforce, capacity for innovation and its infrastructure, enabled manufacturing projects to grow by 1.5 % between 2024 and 2025.”
France is a semi-presidential republic with a prime minister, who is the head of government, appointed by the president who is the directly elected head of state. France is a key player on the global stage and a country at the political heart of Europe as an EU member state. Strasbourg is one of the three official seats of the European institutions. The country is a founding member of the eurozone and has adopted the euro as its currency.
France’ s territory consists of 18 administrative regions: 13 metropolitan( i. e. Continental France) and five overseas regions. All five of the overseas regions, as well as Saint-Martin( a French territory in the Caribbean), are considered part of the EU( with the status of outermost region).
France’ s economy is mixed, with both private and state-owned enterprises. Key sectors include manufacturing( particularly in automation, aerospace and luxury goods), services— notably in tourism and finance— and a strong agricultural sector.
Rising defence spending across the EU presents opportunities for domestic companies, especially in aerospace and advanced manufacturing
Economic forecasts
FRANCE IN FOCUS
Selected analyses of the economic outlook and manufacturing forecasts for France are highlighted in this article.
According to the European Commission’ s November 2025 macroeconomic forecast for France, economic activity in France was set to grow by + 0.9 % in 2026“ as economic and policy uncertainty and the necessary fiscal adjustment weigh on domestic demand.”
“ Activity is expected to pick up slightly to 1.1 % in 2027. Inflation is projected to gradually increase from 1.0 % in 2025 to 1.3 % in 2026, and 1.8 % in 2027. The government deficit is forecast to decline to 5.5 % and 4.9 % of GDP in 2025 and 2026, respectively, before edging up to 5.3 % in 2027. Public debt is set to increase to 120 % of GDP by 2027, from 113.2 % in 2024, on the back of sizeable primary deficits,” said the macroeconomic forecast.
Domestic political uncertainty and fiscal adjustment, however, was expected to weigh on demand in 2026-27.
“ In the first half of 2025, the accumulation of inventories supported GDP growth, reflecting storage of domestic production awaiting export. Public consumption also supported growth while private domestic demand stagnated, held back by economic and political uncertainty both domestically and on a global level,” continued the report.
“ In 2026, the domestic economic and policy uncertainty is set to weigh on real GDP growth, which is expected to reach 0.9 %. Net exports are expected to add 0.4pps. to growth, while private consumption growth is set to accelerate to 0.6 %, contributing 0.3pps. to growth. Private investment is set to rebound after two years of decline, supported by lower interest rates. In 2027, economic activity is projected to gain momentum, bringing real GDP growth to 1.1 %,” it added.
Overall, said the report, the labour market has remained resilient in 2025. However, employment declined marginally in the first half of 2025 and was expected to decline slightly by 0.1 % in 2025 on average, before stabilising in 2026 and recovering in 2027( increasing by 0.2 %).
“ As employment growth moderates while labour force remains
28 | ismr. net | ISMR March 2026