France Q2 GDP Stalls, Misses Growth Estimate

France's economy stagnated quarter-on-quarter in Q2 2026, falling short of preliminary estimates of 0.2% growth, after contracting 0.2% in the previous period. Domestic demand contributed 0.2 percentage points, as household consumption rebounded 0.3% (vs -0.3% in Q1), while government spending rose 0.4% (vs 0.3%). Fixed investment declined at a slower pace of 0.3% (vs -0.8%), marking its second consecutive quarterly contraction. Net exports contributed positively, as exports rebounded 2.9% (vs -3.0%) and outpaced a 1.1% increase in imports (vs -0.6%). However, inventory changes dragged 0.7 percentage points, reversing a positive contribution in Q1. Year-on-year, GDP growth slowed slightly to 0.7% from 0.8% in Q1.

France's economy rebounded by 0.2% quarter-on-quarter in Q2 2026, in line with market expectations, following a revised 0.1% contraction in the previous period, preliminary estimates showed. The recovery was driven by net trade, which contributed 0.6 percentage points to growth, as exports rebounded 2.6% after a 3.1% decline in Q1, outpacing a 0.8% increase in imports. Final domestic demand excluding inventories also returned to positive territory, contributing 0.1 percentage points after subtracting 0.2 points in the previous quarter, supported by a rebound in household consumption (+0.2% vs. -0.3%) and stronger government spending (+0.4% vs. +0.3%). However, gross fixed capital formation declined for a second consecutive quarter (-0.3% vs. -0.8%), while inventory changes subtracted 0.6 percentage points from growth. On a yearly basis, GDP expanded 0.7%, slowing from a revised 0.8% in Q1 and marking the slowest annual expansion since the contraction in Q4 2020.

France’s economy contracted by 0.1% quarter-on-quarter in Q1 2026, compared with preliminary estimates of a flat reading and reversing a 0.2% expansion in Q4. This marked the first contraction since Q2 2020, as foreign trade weighed heavily on growth, subtracting 0.9 percentage points, with exports falling sharply (-3.5% vs +0.9% in Q4) while imports also declined (-0.9% vs -1.0%). Final domestic demand excluding inventories also contributed negatively (-0.2pp vs +0.2), reflecting weaker household consumption (-0.2% vs +0.3%), weighed down by a sharp drop in goods spending (-0.7%), while services were unchanged at +0.2%. Gross fixed capital formation also contracted (-0.6% vs +0.2%), driven by a steep fall in construction investment (-1.7%). In contrast, changes in inventories provided a strong offset, adding +1.0 percentage point after -0.7 in the previous quarter. On a yearly basis, GDP expanded 0.9%, lower than initial estimates of 1.1% and slowing from 1.3% in Q4.