France’s growth stalls in first quarter amid weak domestic demand

Thursday 30 April 2026 - 09:00

France’s economy showed no growth in the first quarter of the year, according to preliminary estimates released by Insee. The stagnation reflects weak domestic demand and a sharp negative contribution from foreign trade, surprising many analysts who had expected modest expansion.

Gross domestic product (GDP) remained flat compared to the previous quarter, after a slight increase at the end of 2025. Household consumption declined slightly, while investment also contracted, highlighting a lack of momentum in internal economic activity.

Economists point to subdued consumer spending as a key factor behind the slowdown. Rising living costs and uncertainty about future economic conditions have led households to limit their expenditures. At the same time, businesses appear cautious, scaling back investment amid global instability.

External trade further weighed on growth. Exports dropped significantly during the quarter, while imports also declined, resulting in a strongly negative contribution to overall economic performance. This suggests that international demand and competitiveness challenges are affecting the French economy.

Despite these weaknesses, changes in inventories helped prevent an outright contraction. Stock variations contributed positively to GDP, offsetting declines in other components, particularly in sectors such as aeronautics.

Earlier projections from the Bank of France had suggested that growth could reach up to 0.3% in the first quarter. However, the latest figures indicate a more fragile economic environment, even before the full effects of recent geopolitical tensions became apparent.

The government’s current growth forecast for 2026 stands at 0.9%, but achieving this target may prove challenging. Sustained quarterly growth would be required throughout the rest of the year, while uncertainties linked to inflation and global events continue to weigh on economic prospects.