Growth down 0.1% in the third quarter: the engine of the French economy still without fuel

Like an engine running out of fuel, the French economy is sputtering. In the third quarter, growth in gross domestic product was again negative, with gross domestic product (GDP) showing a decline of 0.1%, INSEE indicated this Friday. The announcement is surprising: the latest forecast from the National Institute of Statistics expected a modest increase of 0.1%. The year continues with a dark streak, after a negative first quarter at -0.2% and a second at 0%.

Technically, we are not in a recession; For this to happen, two negative quarters would have to follow one another. But it was a close call. In this period perceived as uncertain, domestic demand remains weak, which is very problematic for a GDP based half on consumption.

Businesses, called upon to pay off state accounts, are hesitant to invest Household consumption certainly increased a little more quickly in the third quarter (+0.4% after +0.2% in the previous quarter), however it fell by 0.5% in September. In detail, purchases of electric vehicles drive consumption of transport equipment (+ 3.1%) and energy consumption rebounds, due to the further increase in electricity spending. Food consumption remains stable and that of capital goods is declining.

Companies, called upon to pay off state accounts, are hesitant to invest, waiting to know the winner of the race for the Élysée. The energy shock caused by the war in Iran is reinforcing inflation and also contributing to a fall in consumption. France only owes the forecast of 0.4% for the whole of 2026 to the growth achievements at the end of 2025, that is to say the dynamic inherited from the previous year.

As for 2027, the government's forecast of 1% is considered too optimistic by all economists. “The achievements for 2027 will be extremely weak,” underlines Charlotte de Montpellier, analyst at ING. This anticipates growth of 0.6% in 2027, after only 0.3% in 2026.

Machine-translated from French