French economic growth remains steady as Middle East tensions raise uncertainty

Tuesday 10 March 2026 - 19:45

France’s economy appears to be maintaining moderate growth in early 2026, although rising geopolitical tensions in the Middle East are creating new uncertainties for the economic outlook, according to the country’s central bank.

In its latest assessment, Banque de France indicated that economic activity in the euro zone’s second-largest economy remains on track to expand between 0.2% and 0.3% during the first quarter of the year. The projection reflects relatively stable conditions across several sectors, including industry and services.

However, the central bank warned that the escalation of tensions involving Israel, the United States and Iran could affect the broader economic outlook. Analysts note that geopolitical instability in the region may influence global energy markets and disrupt international supply chains—two factors that can directly affect European economies.

The bank’s monthly business survey, which gathered responses from approximately 8,500 companies between late February and early March, showed that industrial activity remained above its long-term trend for several consecutive months. Technology-related industries were among the strongest contributors to this performance.

The services sector also demonstrated resilience, with companies reporting activity levels slightly higher than previously expected. Meanwhile, the construction sector maintained stable output despite underlying challenges in the market.

At the same time, businesses indicated some pressure on cash flow, mainly due to longer payment delays from clients. Supply chain tensions have also increased slightly, while selling prices continue to rise at a moderate pace.

Economists suggest that while the French economy remains relatively stable for now, external risks—particularly geopolitical tensions and potential energy price fluctuations—will continue to shape the economic outlook in the months ahead.