The economy of France hesitates in the fourth quarter of 2024 as the political crisis continues

France’s economy was slightly reduced in the fourth quarter, Flash data showed Thursday, highlighting the urgent need for French war legislators to exceed their differences and agree on a 2025 budget.

The economy registered a 0.1% contraction in the fourth quarter in the previous three months, Insee country statistics agency revealed ThursdayBelow the growth of 0.4% in the third quarter of 2024. The economists surveyed by Reuters expected growth to be flat.

The besieged economy of France received an impulse Olympic Games in Paris Last summer, but political agitation has been produced since then, leaving fiscal challenges, namely, the great budget deficit of France and the growing debt battery, unsolved.

Political stasis has persecuted Paris since Snap parliamentary elections were held last June and July. Both the extreme left and the extreme right performed well in the respective rounds of the vote, which caused wranglings in the National Assembly on who should govern. In the end, President Emmanuel Macron installed a conservative government in SeptemberAlienantes political factions on the left and the right.

Deeding the extreme right for support, the centrist government of the then Prime Minister Michel Barnier was vulnerable to the challenges of both sides of the political spectrum and, after their budget plans of 2025 deficit reduction were rejected, they were rejected, they were rejected, The government was expelled in a vote without confidence in December.

A new government under Prime Minister François Bayrou He was put in place In December and thanks to both the National Right Rally and the Socialist Party that refuses to support the motion, He survived a vote of trust brought by the extreme left in early January.

However, a 2025 budget has not yet been approved, and Bayrou The thorny debate on pension reform and accept additional spending and job creation in health and education sectors.

Analysts say that Bayrou’s government has a better opportunity to obtain a 2025 budget through Parliament, although conversations approached collapse this week.

“The possibilities of François Bayrou to approve a 2025 deficit reduction budget have been strengthened significantly thanks to a series of political and financial concessions to the socialists in the National Assembly,” said Mujtaba Rahman, managing director of Europe in Eurasia Group, In comments by email on Monday.

“(He) is now in a good position to resolve the short -term budget crisis of France for the end of next month or beginning of March,” Rahman added.

However, the support of the Socialists for an agreement is far from being solid, with budgetary discussions that seem to collapse Wednesday as party officials in the center of the left He suspended his participation in conversations in protest from Bayrou’s comments about immigration.

Even if conversations resume, the government is likely not to reach its ambition to achieve a 5.4% budget deficit target this year.

“We believe that he (Bayrou) now has a good opportunity to succeed, but the text of the final budget may not even reach its reduced ambition of 5.4% of GDP deficit this year,” Rahman said.