Politics
Political tensions over the presidential election and the 2027 budget have further increased uncertainty among the public and business community in France.
Political tensions over the presidential election and the 2027 budget have further increased uncertainty among the public and business community in France. Rising inflation, high energy prices and growing economic uncertainty have prompted French consumers to cut back on spending, raising concerns that business activity and economic growth could come under further pressure. According to foreign media reports, a clear change in consumer behavior is being observed at restaurants and other businesses across France. Some customers are sharing starters instead of ordering full meals, while two people are sharing a single steak. Some are even avoiding ordering wine with lunch.
David Zinoda, the owner of a restaurant in Paris, said consumers’ purchasing power has become extremely limited. He added that only cafés offering relatively cheap beer appear to be busy. Consumer spending accounts for nearly half of France’s gross domestic product (GDP), meaning a decline in household spending could pose a major challenge to the economy. Value-added tax (VAT) generated through consumer purchases is also an important source of government revenue.
According to a September survey by consumer credit company Cofidis, 60 percent of French citizens believe inflation is accelerating. Meanwhile, 58 percent said they were cutting back on non-essential spending, while 54 percent said they were paying closer attention to prices.
More than half of those surveyed expressed concern that their purchasing power could deteriorate further over the next year. The proportion of people holding this view has increased by 10 percentage points compared with last year. Economists and business leaders say cautious consumer behavior could hinder the recovery of the French economy. Rising oil prices and weak wage growth are also affecting people’s ability to spend. Meanwhile, political tensions surrounding next year’s presidential election and the 2027 budget have further increased uncertainty among the public and business community. The government is already facing difficulties in securing approval for the budget from a divided parliament.
