French Economy Stalls in Q1

France’s economy stalled quarter-on-quarter in Q1 2026, compared with market expectations and the previous period’s 0.2% growth, preliminary estimates showed. This marks the weakest performance in five quarters, pointing to rising stagflation risks amid the ongoing Iran conflict. Household consumption declined (-0.1% vs 0.4%), alongside a contraction in gross fixed capital formation (-0.4% vs 0.3%). Meanwhile, growth in government spending was unchanged (0.4%). Net trade also weighed heavily, as exports fell sharply (-3.8% vs 0.8%), a steeper decline than imports (-1.7% vs -0.8%). In contrast, inventory accumulation provided a strong offset, contributing 0.8 percentage points. On the production side, output growth slowed to 0.1% (vs 0.2%), with services slowing (0.2% vs 0.3%), while construction contracted sharply (-1.3% vs 0.3%). Manufacturing rebounded (0.7% vs -0.3%). On an annual basis, GDP expanded 1.1%, following a 1.3% increase in Q4.

France’s economy expanded 0.2% quarter-on-quarter in Q4 2025, easing from 0.5% in Q3 and confirming preliminary estimates. This marked the softest quarterly growth in three quarters, as government consumption moderated (0.2% vs 0.7% in Q3) and gross fixed capital formation slowed (0.3% vs 0.8%), weighed down by manufactured products (-1.0% vs 0.5%) and construction (0.4% vs 0.6%). Inventory changes also subtracted 0.8 percentage points from overall GDP. Meanwhile, household consumption accelerated (0.4% vs 0.1%), driven by goods (0.5% vs 0.1%) and services (0.2% vs 0.1%), while net trade added 0.7 points, with exports rising (1.0% vs 3.1%) and imports falling (-1.1% vs 1.4%). On an annual basis, GDP expanded 1.2%, higher than initial data of 1.1% and the strongest since Q1 2024, picking up from 1% in Q3. For the full year 2025, the French economy grew 0.9%, slowing from 1.1% in 2024.

France’s economy expanded 0.2% qoq in Q4 2025, easing from a 0.5% rise in Q3 and matching market expectations, flash data showed. It marked the weakest quarterly growth in three quarters, reflecting a softer contribution from domestic demand. Government spending growth moderated (0.3% vs 0.7% in Q2), while fixed investment lost momentum (0.2% vs 0.7%). The investment slowdown was driven by weaker outlays on transport equipment, capital goods, and construction. Inventory changes remained a drag on growth, subtracting 1.0ppts. In contrast, household consumption accelerated (0.3% vs 0.1%), supported by faster growth in goods spending and a further rise in services consumption. Net trade provided a strong boost, contributing 0.9ppts, with exports slowing sharply (0.9% vs 3.2%) and imports falling (-1.7% vs 1.5%). On an annual basis, GDP rose 1.1%, accelerating from 0.9% in Q3 but slightly below the 1.2% forecast. Still, it marked the strongest yearly expansion in five quarters.