30.04.202605:38:13UTC+00French Economy Stalls in Q1

France’s economy flatlined on a quarterly basis in Q1 2026, matching expectations and slowing from 0.2% growth in the previous quarter, according to preliminary estimates. This is the weakest performance in five quarters and underscores mounting stagflation risks against the backdrop of the ongoing conflict in Iran.

Household consumption slipped (-0.1% vs 0.4% previously), while gross fixed capital formation also fell (-0.4% vs 0.3%), signaling weaker domestic demand. Government consumption maintained its prior pace, rising 0.4%.

External trade was a major drag on growth. Exports declined sharply (-3.8% vs 0.8%), outpacing the fall in imports (-1.7% vs -0.8%) and resulting in a negative contribution from net trade. In contrast, inventory accumulation provided a significant offset, adding 0.8 percentage points to growth.

On the production side, overall output growth eased to 0.1% (from 0.2%). Services activity moderated (0.2% vs 0.3%), and construction recorded a steep contraction (-1.3% vs 0.3%), while manufacturing returned to growth (0.7% vs -0.3%).

Year-on-year, GDP expanded by 1.1% in Q1, following a 1.3% increase in Q4.