France GDP

Economy rebounds in Q2 2026

Q2 rebound in line with market expectations: France's GDP expanded 0.2% in seasonally adjusted quarter-on-quarter terms in Q2, following a 0.1% contraction in the prior quarter. Q2’s print matched market expectations, but fell short of both the prior five-year trend and the euro area average. On a year-on-year basis, the economy strengthened 0.7% in Q2, following 0.8% growth in the prior quarter.

Economy returns to growth on broad-based gains: Relative to the prior quarter's data, readings in Q2 improved for private consumption (+0.2% on a seasonally adjusted quarter-on-quarter basis vs -0.3% in Q1), government consumption (+0.4% vs +0.3% in Q1), fixed investment (-0.3% vs -0.8% in Q1), exports of goods and services (+2.6% vs -3.1% in Q1) and imports of goods and services (+0.8% vs -0.7% in Q1). The rebound in private spending was driven by an uptick in the consumption of household goods plus accommodation and food services. Moreover, net foreign trade strengthened as exports rebounded more strongly than imports, driven by an uptick in aeronautics equipment shipping following a weak Q1. Still, fixed investment fell again in Q2 due to a steeper drop in construction investment amid higher costs, though it fell at a softer pace than in Q1 as investment in transport equipment rebounded strongly thanks to the delivery of a cruising sailboat. Finally, inventory drawdowns contributed negatively to GDP growth mainly due to aerospace products, following a significant build-up of stock in the previous quarter.

GDP growth seen stabilizing ahead: Looking ahead, sequential GDP growth is seen stabilizing through the end of the year, but momentum will likely remain subdued. Weak labor-market conditions and real wages will keep a lid on private consumption, while temporary support for manufacturing and exports—notably production disruptions among certain Asian competitors amid the Iran war—will likely fade, although strong aerospace demand and higher defense spending should provide tailwinds to investment. Looking at 2026 as a whole, GDP growth is set to hit a new post-pandemic low.

Panelist insight: EIU analysts commented: “We expect GDP growth to remain lacklustre in 2026, before strengthening modestly later in our forecast period to 2030. A sharp rise in investment in infrastructure and defence in Germany will have positive spillover effects from later this year. However, higher fuel prices have pushed up inflation and squeezed disposable incomes. US tariff policy uncertainty also remains in play”

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