The French economy stagnated in the second quarter of 2026. In its detailed results published on Friday, August 28, INSEE revised its growth estimate for the period between April and June to 0%, compared to the initially announced increase of 0,2%. The first quarter was also revised, with the decline in GDP now estimated at 0,2%, instead of 0,1%.
The Institute attributes these adjustments to lower-than-expected agricultural production and rising prices in the service sector, particularly transportation. Economy Minister Roland Lescure believes these figures reflect the initial economic consequences of the heatwave and drought. Their impact will need to be factored into the Ministry of Finance's forecasts during the preparation of the next budget.
Consumption is picking up again, but purchasing power is declining.
Household consumption rebounded by 0,3% in the second quarter after declining by the same amount in the first three months of the year. Government spending increased by 0,4%, while investment fell by a further 0,3%. Exports rose by 2,9%, driven in particular by the aerospace sector, compared to a 1,1% increase in imports. Foreign trade thus contributed positively to GDP growth.
This improvement, however, masks a deterioration in the situation for households. Their purchasing power per consumption unit decreased by 0,5% over the quarter, and their savings rate fell from 17,9% to 17,2%. Since the beginning of the year, the carry-over growth has reached only 0,3%, revealing a French economy weakened by low investment, agricultural difficulties, and the increasing impact of climate-related risks.
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