Non-compete and related clauses are fairly common in France. According to employers, between 19% and 27% of private-sector employees are currently bound by a non-compete clause compared to an average of 20% to 30% across the OECD countries covered by the survey. Results from the employee survey confirm a high prevalence: 20% of workers report being bound by a non-compete clause, with an additional 21% who believe they “probably” are, compared to an average of 15% and 21% across the OECD countries covered by the survey. In many countries, including France, the higher incidence reported by employees is essentially driven by higher uncertainty among employees than employers, reflected in the high share of “probably yes” answers.

Growth is expected to slow to 0.7% in 2026 and remain weak in 2027, at 0.8%. Economic activity strengthened in the second half of 2025, supported by a pick-up in investment and exports, and a modest recovery in household consumption, but slowed in early 2026. Economic momentum has been disrupted by the evolving conflict in the Middle East. The resulting surge in inflation is eroding purchasing power, weighing on private consumption. Heightened uncertainty is set to dampen business investment. Residential investment should prove more resilient, supported by the earlier rise in building permits, although higher interest rates will continue to weigh on the existing‑homes market.

The fiscal deficit fell from 5.8% of GDP in 2024 to 5.1% of GDP in 2025, outperforming the target of 5.4% of GDP due to better-than-expected revenues, notably corporate taxes, and tight expenditure management. It is projected to reach the government objective of 5% of GDP in 2026 and decline further to 4.6% of GDP in 2027. Risks are high, however, as these projections assume no additional broad-based energy support measures and a gradual recovery in energy production and exports in the Middle East from the second half of 2026. While France is relatively less exposed to the disruption in Middle East exports given its energy mix, further electrification of industry and transport would increase resilience. Growth would be strengthened by measures supporting higher employment of young and older workers, and by tackling productivity bottlenecks through stronger skills, R&D and digital investment.

France’s GDP per capita falls short of top OECD performers, mainly due to lower labour productivity and weaker employment and participation rates. A persistent investment gap, driven by underinvestment in intangible assets despite higher tangible asset investment, also contributes to sluggish performance. The labour productivity gap widened during the pandemic, largely due to widespread labour hoarding.

Boosting productivity and growth requires better use of talent by improving foundational competencies learned in school, reducing educational inequality, enhancing digital skills, and strengthening vocational outcomes. More effective innovation support, lower barriers in services, and reduced taxes on labour would further boost competitiveness and job creation.