France GDP Falls 0.1% Amid Political and Economic Instability
France's economy contracted 0.1% in the third quarter of 2026, driven by falling investment and political paralysis as President Emmanuel Macron faces term limits.
The French economy contracted by 0.1% in the third quarter of 2026, according to data from the Institut National de la Statistique et des Etudes Economiques. This decline follows a 0.2% drop in the first quarter and stagnation in the second, extending a trend of negative or flat growth that began in late 2025.
France is experiencing a downturn fueled by retreating exports, a decline in construction output, and tumbling investment from both businesses and households. Consumer confidence has hit a 13-year low, pressured by student riots and inflation driven by energy price surges linked to a war in Iran. In response to rising inflation, the European Central Bank raised key interest rates twice this year, with President Christine Lagarde stating that risks to inflation remain to the upside.
Economic instability is further compounded by political paralysis in parliament and uncertainty regarding the elections to replace the term-limited President Emmanuel Macron. Consequently, the International Monetary Fund downgraded France's annual growth expectations to 0.4% and warned the government to stabilize its public finances.
