France’s economy recorded zero growth in the first quarter of this year due to “sluggish” domestic demand and a “strongly” negative contribution from foreign trade, the national statistics agency INSEE said Thursday.
The first estimation of first quarter gross domestic product (GDP) shows the impact of the war in the Middle East, which began on February 28.
As little as two weeks ago, the French central bank estimated that the country’s economy could grow by as much as 0.3 per cent in January through March, while INSEE had cut its forecast from 0.3 per cent to 0.2 per cent growth at the end of March.
France’s economy had expanded by 0.2 per cent in the final quarter of 2025.
Final domestic demand is “sluggish”, said INSEE, with households spending declining “slightly”, making a -0.1 percentage point contribution to growth in the first quarter after having provided a 0.4 per cent boost in the final quarter of 2025.
Foreign trade made a “strongly” negative 0.7 percentage point contribution to growth in the quarter, with exports falling “sharply”, according to INSEE.
In mid-April, France slightly lowered its full-year GDP forecast to 0.9 per cent, down from a previous 1.0 per cent over the economic situation linked to war in the Middle East.
“A very moderate impact is expected on growth,” Finance Minister Roland Lescure said at the time.
He also said he expected inflation to remain limited “despite the energy shocks and sharp rise in oil prices”.
But INSEE on Thursday said that consumer prices rose by 2.2 per cent year-on-year in April following a 1.7 per cent increase in March.
This increase was driven by a sharp rise in energy prices, which surged by 14.2 per cent year-on-year in April after a 7.4 per cent increase in March, as the war in the Middle East sent global oil prices soaring.
