French businesses concerned about business environment

VTV.vn - French businesses and people are more cautious in spending and investing amid prolonged political instability, putting economic growth at risk of slowing down.

After a week of tumultuous French politics, on the evening of October 12 (local time), France officially announced the new government list. Experts say the French government still has a lot of work to do, including presenting a budget bill and restoring economic stability, because an unstable environment risks reducing market and business confidence, thereby delaying investment and slowing down France's economic growth.

For Willy Jouie, owner of a carpentry workshop in the suburbs of Rennes, France, the recent political turmoil has been a headache for his business. The sharp increase in material costs in recent years has been a problem. In addition, constantly changing management policies have forced small businesses like his to reconsider their operations to avoid losses.

"During this period of uncertainty, we are not investing or developing, but instead focusing on stability. We are not recruiting new employees, and we are also considering salary and bonuses for workers. Currently, our order book has been reduced to only two and a half months, or at most three months, because customers and partners are hesitant to spend money during this period," said Willy Jouie, manager of the Mulonnière carpentry workshop.

"During this period, we have almost no new construction projects. The work is mainly renovation and repair. For now, we have to maintain it like this," said Mr. Fabrice Auguin - Carpenter.

It is estimated that the recent political instability has caused the French economy to lose about 0.5 percentage points of growth (about 12 - 15 billion Euros), causing a significant drag on the second largest economy in the Eurozone.

In this situation, both business and household confidence showed signs of weakening. Households increased savings and cut back on consumption, while businesses delayed investment plans.

Bank of France surveys show uncertainty has risen to its highest level since the energy crisis in 2022, especially in the industrial and construction sectors. The governor of the Bank of France confirmed that France's third-quarter growth was just 0.3% and growth for the whole of 2025 is expected to be around 0.7%.

Source: https://vtv.vn/doanh-nghiep-phap-lo-ngai-ve-moi-truong-kinh-doanh-100251013152614285.htm