The Gap

When Economic Growth Becomes a Narrative,

Alexandra Richert

France’s latest economic figures suggest a country that has weathered the current slowdown better than expected. Growth remains positive. The feared downturn has not materialized. For policymakers, the conclusion is straightforward: stability has held.

Beyond the headline indicators, the picture becomes more complex. Corporate bankruptcies have been rising steadily over recent quarters. Restructurings and layoffs are spreading across manufacturing, retail and business services, often in fragmented and localized forms. Small and medium sized enterprises are bearing the brunt of the adjustment. Local governments are postponing or cancelling investment projects. Outside major metropolitan areas, everyday economic activity is slowing. Taken together, these signals point to a structural weakening rather than a cyclical fluctuation.

This discrepancy between macroeconomic performance and economic experience is neither new nor unique to France. It tends to emerge in advanced economies when aggregate growth is driven by a limited number of capital intensive sectors, while the broader productive fabric adjusts through attrition. Gross domestic product captures output. It does not measure distribution, resilience or the capacity of smaller actors to absorb shocks.

In France, recent growth has relied on three main pillars. Public spending has played a central role in cushioning the impact of successive crises, at the cost of increased fiscal dependency. A small number of highly concentrated sectors, including energy, advanced manufacturing and high value added services, have remained resilient. At the same time, large scale investment in technology, particularly artificial intelligence and digital infrastructure, has been promoted as a driver of future competitiveness. Together, these elements sustain a positive growth figure without guaranteeing a balanced productive dynamic.

Other indicators tell a different story. Credit conditions for small firms have tightened. Margins have come under pressure as energy costs, financing conditions and regulatory constraints converge. Productive investment outside major strategic projects has slowed or been deferred. Local authorities, facing mounting budgetary constraints, increasingly prioritize short term financial balance over long term development. These trends undermine the economy’s capacity to project itself forward.

French economic authorities are not blind to these developments. Long term data, sectoral breakdowns and territorial reporting are readily available within the administration. Yet the growth figure retains a powerful political function. It provides reassurance. It signals control. It buys time. By emphasizing aggregate performance, the government can delay difficult budgetary and structural choices while framing economic stress as manageable.

The current budgetary sequence reflects this logic. Major decisions are postponed. Structural reforms are fragmented. Policy announcements multiply without a consolidated hierarchy. This is not simply indecision. It reflects a deliberate management of political risk, in which preserving equilibrium takes precedence over transformation.

The rise in bankruptcies and layoffs fits this pattern. Economically significant, these developments remain politically diffuse. Each closure is local. Each restructuring is sector specific. No single event crystallizes into a national shock. The average holds while the margins erode. Adjustment takes place quietly, through accumulation rather than rupture.

International comparison sharpens the contrast. The United States has increasingly embraced economic confrontation as a tool of power, particularly through trade policy. Central banks, by coordinating closely around the Federal Reserve, implicitly acknowledge the fragility of a global monetary system built on confidence. Europe, and France in particular, continues to frame the moment as a return to normalcy, even as the rules of economic competition are being rewritten.

France’s emphasis on technological investment must be read in this context. Artificial intelligence, data centers, digital infrastructure and advanced medical technologies form the backbone of a strategy aimed at maintaining relevance among advanced economies. These investments are not irrational. But they also function as a forward looking narrative at a time when large segments of the everyday economy are under strain. Their ability to diffuse benefits across the broader productive fabric remains uncertain.

The debate, then, is not about whether growth is real. It is. The issue lies in what it fails to capture. Growth figures do not account for the silent erosion of small businesses, the uneven access to credit, or the diminishing capacity of certain regions to invest and adapt. They say little about the social and territorial sustainability of the current trajectory.

France is not facing an acute economic crisis. Nor is it experiencing a robust recovery. It occupies an extended intermediate phase, one in which stability has become an end in itself. An economy sustained by aggregation, while its vulnerabilities deepen beneath the surface.

Economic history suggests that such phases can persist. It also suggests that unaddressed gaps rarely close on their own. They accumulate, gradually, until the narrative no longer suffices to contain the reality it was meant to describe.