From cautious economic growth to bold AI innovation and regulatory shifts, here are the top stories driving France’s business and tech scene this week.
1. French Economic Growth Slows to 0.1% in Q1 2025
France’s economy barely grew in the first quarter of 2025, with GDP rising just 0.1%. Weak household consumption and stagnant investment were the main culprits, reflecting ongoing political instability and global trade tensions.
2. Government Cuts 2025 Growth Forecast Amid Trade Uncertainty
The French government revised its 2025 growth forecast down from 0.9% to 0.7%, citing uncertainty over world trade and US tariff policies. The Bank of France and the French Economic Observatory have also issued lower projections, raising concerns for the year ahead.
3. Corporate Dividend Payouts to Hit €98 Billion in 2025
Shareholders of France’s largest companies are set to receive nearly €98 billion in dividends this year, with seven multinationals-led by TotalEnergies, LVMH, and Stellantis-accounting for half the total. This marks a record payout and signals strong corporate profits despite economic headwinds.
4. New Temporary Corporate Tax Hits Large Companies
A new finance bill introduces an exceptional corporate income tax (CIT) contribution for companies with French revenue above €1 billion. The tax rate varies, with a 20.6% rate for those earning between €1 billion and €3 billion, and includes changes to R&D tax credits and share buyback taxes.
5. Data Center Market Set to Nearly Double by 2030
France’s data center market, valued at $3.42 billion in 2024, is projected to reach $6.40 billion by 2030. Growth is driven by AI, cloud demand, and sustainability initiatives, with 146 existing and 21 upcoming facilities across more than 40 cities.
6. CNIL Issues Strict AI Guidelines for Public Services
France’s data privacy authority, CNIL, released recommendations for AI in public services, emphasizing human oversight, data minimization, and bias prevention. The guidance aims to ensure ethical and privacy-by-design principles in AI deployments.
7. WorkflowAI Launches to Automate Digital Productivity
Pierre Valade, co-founder of the Sunrise calendar app, launched WorkflowAI-a startup leveraging AI to automate workflow management and routine tasks. The venture highlights France’s ongoing push for AI-driven productivity tools.
8. Airbnb Faces Crackdown in French Cities
Cities like Biarritz are imposing stricter rules on short-term rentals and secondary residences to address the housing crisis. These measures signal the end of Airbnb’s “golden age” in certain French markets, impacting property owners and the tourism sector.
9. French Debt Rises to €3.3 Trillion, 113% of GDP
France’s public debt climbed by €202.7 billion last year, reaching €3.3 trillion and 113% of GDP. The economic minister has warned this poses a threat to financial stability, prompting debates on fiscal discipline and tax policy.
10. R&D Tax Credit Base Narrowed
The 2025 Finance Bill reduces the R&D tax credit base by lowering the flat rate for eligible personnel costs from 43% to 40% and excluding certain patent-related expenses. The innovation tax credit rate also drops from 30% to 20%.
11. Extension of Innovation and Collection Tax Credits
The French government extended innovation and collection tax credits until December 31, 2027, supporting ongoing investment in R&D and creative industries despite tighter eligibility criteria.
12. Share Buyback Tax Introduced for Large Firms
A new tax targets share buybacks by large companies, calculated on all transactions since March 2024. This move aims to discourage excessive buybacks and encourage reinvestment in the French economy.
13. French Tech Startups Attract Global Attention
French startups continue to draw international investment, particularly in AI, fintech, and green tech. Notable deals and partnerships this week highlight France’s growing reputation as a European innovation hub.
14. Vallourec Resumes Dividends After 10-Year Hiatus
Steel pipe manufacturer Vallourec will distribute dividends to shareholders for the first time in a decade, reflecting improved financial health and renewed investor confidence.
15. LVMH CEO Bernard Arnault Secures Extended Tenure
Despite a challenging economic climate, LVMH’s Bernard Arnault received approval to remain CEO until age 85, reinforcing continuity at the helm of the world’s largest luxury group.
16. French Productivity Council Calls for Bold Innovation Policies
The French National Productivity Council’s fifth report urges strong political choices to support innovation and competitiveness, underlining the need for sustained investment in R&D and digital transformation.
17. French Economy Faces Risks and Uncertainties
Analysts warn that the French economy is accumulating risks, including political instability, trade tensions, and high public debt. Policymakers are urged to balance stability with reforms to safeguard future growth.
18. Trump’s Tariff Pause Brings Temporary Relief to French Industry
US President Trump’s decision to suspend new tariffs (except on China) for three months provided cautious optimism for French exporters, especially automakers, though uncertainty remains high.
19. Spanish Group Acquires Christian Lacroix
Sociedad Textil Lonia, a Spanish company, acquired the iconic French fashion brand Christian Lacroix, signaling ongoing international interest in French luxury assets.
20. French Left Pushes for Permanent Wealth Tax
Amid rising debt and inequality, France’s left-wing parties are advocating to make the one-off wealth tax permanent, reigniting debate over the country’s fiscal and social policies.
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