The French economy is declining further: INSEE announces a decline of 0.1% in GDP in the third quarter
INSEE published this Friday the growth of the French economy in the third quarter. After a decline of 0.2% in the first and stagnation at 0% during the second, it fell by 0.1% for the period from July to September.
To everyone's surprise, France's gross domestic product (GDP) fell by 0.1% in the third quarter, the National Institute of Statistics (Insee) announced on Friday, after stagnating in the second quarter and falling by 0.2% in the first. Production of goods and services fell by 0.1% from July to September, specifies INSEE, while household consumption accelerated to +0.4%, but investment fell sharply again (-0.6%) and foreign trade also contributed negatively to GDP, by 0.6 points. At the beginning of September, INSEE already pointed out in its economic report that France was "on orange alert".
By lowering its forecasts to 0.4% growth, compared to 0.7% expected until then, it noted that "the French economy is stalling", becoming "the only large advanced economy where activity will slow down in 2026". Towards a first recession since 2009? Economists nevertheless predicted a slight rebound in recent months.
Analysts thus forecast a timid recovery in growth, at 0.1%. Not enough, in any case, to see a clear improvement in the French economy. Anthony Morlet-Lavidalie, of the Rexecode institute, who for his part anticipated an increase of 0.1% in GDP in the third quarter, estimated that "there are no growth drivers today in the French economy, no engine", apart from "a few pockets" such as aeronautics or data centers.
Questioned on BFM Business this morning, he assumed that “the decline was not anticipated to this extent”. “This is very bad news, when we average over the year 2026, we are at the start of a recession,” he notes. “It’s a rather dark scenario for the French economy.
"This new setback further undermines the government, which was originally counting on annual growth of 0.7%. After three quarters, the account is not there at all and France could instead fall into its first year in recession since 2009. Especially since, according to Anthony Morlet-Lavidalie, "we may not have completely hit the bottom, household consumption could suffer even more in the quarters to come."
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- BFM Business30 Oct, 07:31
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