Business Creation and Inflation: France Confronts Two Key Indicators

Entrepreneurship: The New Normal After the Post-Covid Surge

Since the all-time high reached in 2022—nearly one million business creations according to INSEE—France is seeing evolving trends. For 2025, the dynamics of 2023 and 2024, marked by a slight decline, continue: nearly 940,000 new businesses are estimated to have been established over a rolling twelve-month period, a level that remains well above the pre-pandemic average.
This slowdown is attributed by experts to rising economic uncertainties, tightening financing conditions, and more cautious decision-making by self-employed entrepreneurs, who still account for more than 60% of new businesses, according to the latest INSEE economic report. The personal services and professional consulting sectors continue to drive the market.
Entrepreneurship is now establishing itself as a structural response in a labor market open to transitions, but the concentration of new businesses in certain segments suggests a less diversified ecosystem than in 2021-2022.

Inflation: From Surge to Gradual Decline

Inflation, which had surged beyond 6% in 2022 and peaked at 5.2% in 2023, is now experiencing a continuous decline. According to the Bank of France and INSEE, consumer price increases have fallen below the 3% mark in September 2025 (2.8% year-on-year). This respite is mainly due to easing energy markets and the normalization of global supply chains.
Food prices, which were long drivers of the inflationary spiral, are slowing down, although consumers have not yet seen a return to pre-crisis levels. However, this price moderation is still considered fragile. Wage increases, implemented in several sectors, continue to fuel tensions, as does geopolitical uncertainty impacting logistical costs. This relatively controlled inflation trajectory guides investors' choices between bonds, real estate, or stocks, while also encouraging increased strategic monitoring of the real cost of capital.

Balancing Creation and Inflation: Investor Trade-offs

In this context of easing inflation, France continues to display a dense entrepreneurial landscape, though within a financially cautious environment. For investors, the central question lies in the relationship between entrepreneurial risk and actual returns amid better-contained inflation. While the vitality in business creation reflects a sustained spirit of initiative, the sectoral concentration raises questions about the recovery's robustness in certain areas of the economy, particularly the still-struggling manufacturing industry.
On the other hand, less burdensome inflation eases pressure on margins but encourages the prioritization of selective trade-offs: targeted private equity, high-value-added sectors, and the necessity to guard against residual uncertainties, whether monetary or geopolitical. The overall landscape invites investors to refine their understanding of fundamentals and to redefine their allocation strategies looking towards 2026.