France Narrowly Avoids Recession Amid Economic Stagnation

The French Republic narrowly avoided a recession during the first half of 2026, according to revised data from the National Institute of Statistics and Economic Studies. The updated figures show that economic output shrank 0.2% in the first quarter and remained stagnant in the second quarter.

These results revise previous estimates that had suggested a smaller initial decline followed by a 0.2% expansion. While exports and consumer spending rebounded during the second quarter, those gains were offset by a decline in investment and falling inventories throughout the first six months of the year.

This period of stagnation complicates government efforts to manage a significant budget deficit. The situation is further pressured by a global bond market selloff, which has increased borrowing costs for the country.