The disinflationary process is on track, with headline inflation expected to reach 2.3 per cent this year and return to target in the first half of 2025, IMF said after its executive board concluded the Article IV Consultation with the country recently.
Over the medium term, growth is projected to converge towards its potential rate of 1.3 per cent.
The outlook remains subject to high uncertainty. Political fragmentation and policy uncertainty domestically could delay fiscal consolidation and reform efforts, weighing on confidence and public finances, IMF noted.
External downside risks, including escalating geopolitical tensions and an abrupt global slowdown in key trading partners, could also significantly impact the outlook.
In contrast, faster reform momentum in France and at the European Union (EU) level could mitigate these risks, an IMF release said.
IMF executive directors noted that the French economy had remained resilient in the face of recent shocks and welcomed the gradual recovery and the crisis response and slower-than-expected growth had weighed on public finances, reducing fiscal space at a time of rising investment needs for the green and digital transitions.
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