REGIONAL REPORT buoyant, productivity is expected to accelerate and the unemployment rate is set to gradually increase to 8.2 % in 2027,” outlined the forecast.
The report expected inflation to increase to 1.3 % in 2026 on the back of higher agricultural and food prices.
“ In 2027, despite lower services inflation, headline inflation is anticipated to increase to 1.8 %, due to higher food prices and the entry into force of ETS2, if not delayed( which is expected to lift energy prices),” it continued.
Image: Stephanie Klepacki( Unsplash).
Industry, labour and investments
On 2 December 2025, the OECD released its Economic Outlook for France. GDP growth was projected to decrease to 0.8 % in 2025, before increasing to 1 % in 2026 and 2027.
“ Domestic and international uncertainty have weighed on growth in 2025, delaying consumption and investment decisions, although strong exports from the aeronautics sector have provided some offset. Assuming a new budget is adopted by late 2025, reduced uncertainty will improve growth prospects in 2026 and 2027. Inflation is expected to edge up as earlier downward pressures from energy and telecommunications prices ease, but remain contained, reaching 1.6 % in 2027,” said the OECD.
“ The labour market weakened in the third quarter of 2025 but remains broadly resilient, with employment still above pre-pandemic levels. Inflation fell faster than expected during the first half of 2025 and was 0.8 % in October, driven by lower regulated energy prices, slower wage growth and increased competition in telecoms,” it added.
The OECD also highlighted trade challenges and opportunities for France.
“ Direct exposure to U. S. tariffs on imports is limited, with the United States accounting for just 5 % of both exports and imports, but France remains vulnerable to a broader slowdown in global demand( particularly in Europe, which absorbs 55 % of French exports). However, rising defence spending across the EU presents opportunities for domestic companies, especially in aerospace and advanced manufacturing,” it reported.
On 29 January 2026, Business France published national figures for the“ Annual Report 2025: Foreign Investment in France” report which confirm that foreign businesses continue to choose France as an investment location.
According to Business France, 1,878 foreign investment decisions were recorded, creating or maintaining 47,734 jobs in 2025. France, it said, has cemented its position as a leading destination for foreign investors. In terms of the activities targeted by these investments, retail outlets led the way in
La Défense, Courbevoie, France.
Image: Cyril Mzn-Wsvth, Unsplash.
A view of the Post de Bir-Hakeim steel arch bridge that crosses the river Seine in Paris.
2025( 522 investment decisions recorded), followed by manufacturing activities( 472 projects) and decision-making centres( 299 projects).“ The strength of the French domestic market is confirmed by the dense presence of brands belonging to foreign groups. France’ s structural advantages, namely its skilled workforce, its capacity for innovation and its infrastructure, enabled manufacturing projects to grow by 1.5 % between 2024 and 2025. After an exceptional year in 2023, such projects returned to a level similar to that of 2021 and 2022,” said the report from Business France.
“ New site creations in France remained the leading type of business operation in 2025, amounting to 1,161 projects( or 62 % of all investment decisions). The 563 expansions accounted for 30 % of recorded decisions. Takeovers, accounting for 3 % of projects, played a crucial role in preserving the industrial fabric and jobs, with 48 sites in financial difficulties taken over( safeguarding 5,249 jobs). This distribution illustrates a balanced model of economic attractiveness, based both on attracting new investors and strengthening existing operations. Takeovers also contribute to modernising production facilities and ensuring the sustainability of economic activity, particularly in France’ s most vulnerable regions,” it added.
The European Union remained the primary source of foreign investments, accounting for 72 % of projects and 56 % of jobs. The United States, however, remained the leading contributor in terms of jobs, representing nearly one-quarter of the jobs identified by Business France. Germany was ranked second with over 5,200 jobs, or 11 % of the total, with Italy completing the top three, contributing 10 % of the jobs projected for 2025.
“ Across France, industrial investments were largely concentrated in municipalities with fewer than 20,000 inhabitants, which were the recipients of 45 % of projects and 52 % of associated jobs. This distribution demonstrates how international projects can have a significant impact on the country,” concluded the report.
A surge in related research and development activity will further contribute to a pro-investment climate in France, complementing the‘ France 2030’ investment plan which designates € 54bn for vertical industrial policy in high-growth sectors.
Image: Mahdi Samadzad, Unsplash.
Business climate indicators
The Banque de France publishes a range of monthly and quarterly economic surveys that provide a snapshot of the French economy in the form of business climate indicators and short-term forecasts. In February
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