Silent Recovery or Monetary Illusion? What the Latest Report from the Bank of France Says

A symbol of stability since 1800, the Banque de France houses one of the most discreet yet powerful barometers of the economy: the M3 monetary aggregate. It is behind these walls that, in the silence of the curves, the tremors of a country hesitating between recovery and wait-and-see are observed.

After two years marked by the energy crisis, the French economy seemed sluggish. Moreover, the surge in inflation exacerbated this situation. Additionally, the spike in interest rates contributed to this economic sluggishness. However, the latest indicators published by the Bank of France in May 2025 reveal a timid recovery: increase in the money supply, revival of business credit, rebound in bank deposits. These are signals that suggest a possible change in pace.

The M3 money supply: an indicator on the rise

Often overlooked by the general public, the monetary aggregate M3 includes banknotes, current accounts, savings accounts, and short-term investments. In May 2025, this aggregate increased by 2.3% over one year. Furthermore, this increase contrasts with the 0.2% recorded in April. This surge, noted in the latest monthly bulletin of the Bank of France in June 2025, may indicate that more money is circulating in the economy: households consuming more, businesses reinvesting, banks lending more.

Symbol of stability since 1800, the Banque de France houses one of the most discreet yet powerful barometers of the economy: the M3 monetary aggregate. It is behind these walls that the country's tremors are observed in the silence of the curves. Indeed, this country is hesitating between recovery and wait-and-see. — Symbol of stability since 1800, the Banque de France houses one of the most discreet yet powerful barometers of the economy: the M3 monetary aggregate. It is behind these walls that the country’s tremors are observed in the silence of the curves. Indeed, this country is hesitating between recovery and wait-and-see.

For the economist Agnès Bénassy-Quéré, interviewed by Le Monde, "the increase in M3 often reflects a revival of activity, but caution is needed: high inflation can also artificially inflate this indicator."

Businesses, the primary drivers of the stir

The credit recovery mainly concerns non-financial corporations, that is, productive businesses. Their credit balances have increased by 2.1% over one year. This is the strongest increase in over a year. It represents nearly 29 billion euros injected into the economy. According to the Bank of France, this increase is explained by the gradual adaptation of businesses to high interest rates. Additionally, it is due to the need to revive investment after several quarters of waiting.

Every day, the Bank of France checks, sorts, and recycles up to 3 million banknotes. A routine task, yet revealing: the money supply in circulation is a vital indicator for assessing confidence in the economy — and in this spring of 2025, it is stirring.

For the French Banking Federation (FBF), "the credit dynamic, even moderate, is a positive element in an always uncertain context." The new credits are used for the modernization of production tools. Moreover, they are used to maintain activity or make new hires.

Households: confidence that remains fragile

On the side of individuals, the trend is improving. Indeed, for the first time since 2022, sight deposits are increasing. That is, the money available in current accounts is up by 1.5% over one year. Meanwhile, term deposits, which are more rigid, have dropped by nearly 9%. The French therefore favor flexibility, preferring regulated savings accounts, which continue to rise (+4.1%).

While the world's great fortunes continue to grow, French households are opting for flexibility. Regulated savings accounts are on the rise, and demand deposits are recovering: a measured return of liquidity, reflecting a caution still rooted after the shocks of inflation. — While the world’s great fortunes continue to grow, French households are opting for flexibility. Regulated savings accounts are on the rise, and demand deposits are recovering: a measured return of liquidity, reflecting a caution still rooted after the shocks of inflation.

This evolution reflects strategic caution. Households want to remain liquid and available to consume or face the unexpected. They avoid locking themselves into blocked investments, as economic prospects remain uncertain.

The limits of a low-key recovery

Can we therefore speak of a real recovery? Not so fast. While the money supply and credit are picking up, the growth forecast by the Bank of France remains modest: barely +0.6% for GDP in 2025. A good part of the monetary flows is still absorbed by inflation. Foreign trade is struggling, and the cost of energy is high.

Other signals are mixed: financial flows with the rest of the world are exploding (+9.7%), while financing to the public sector is declining. Interbank operations and derivatives show increased volatility, reflecting persistent uncertainties in the markets.

Towards a change of pace, but not direction?

The data from May reveal more of a stir than a rebound. The French economy seems to be waking up slowly, without euphoria, but without a new halt either. Businesses are taking some risks, households are slightly loosening the grip, liquidity is circulating better – but all this remains fragile.

As economist Philippe Martin reminds us: "There may be the beginning of a more dynamic cycle, but the headwinds remain strong. Nothing indicates, for now, that France is out of the woods."

The French economic surge, between measured hope and caution

Is France experiencing a real recovery or just a statistical surge? While monetary indicators are turning orange, real growth is still stalling. In this context, vigilance is required: the restart may be underway, but it will depend on the ability of economic actors – businesses, households, public authorities – to transform this stir into a real dynamic.

Key takeaways

Money supply increase: +2.3% (May 2025)
Business credit: +2.1% (strongest increase in a year)
Expected growth: +0.6% of GDP in 2025 (Bank of France)

This article was written by Yoann Pantic.