French GDP grows 0.2% in Q2, avoiding recession but missing forecast

GDP rebounds but misses forecast

France's economy grew 0.2% in the second quarter of 2026, according to the preliminary estimate from the national statistics institute INSEE published on 30 July. The expansion followed a 0.1% contraction in the first quarter, meaning the country avoided a technical recession. The figure fell short of INSEE's own forecast of 0.3% but was in line with the projection from the Banque de France. The growth came despite an uncertain international environment, including the impact of the Middle East conflict on energy consumption and a rise in fuel prices from March that weighed on household budgets.

Drivers of growth

The rebound was driven by a sharp recovery in exports, which rose 2.6% after a 3.1% drop in the first quarter. Net foreign trade contributed 0.6 percentage points to GDP growth, reversing a negative contribution of 0.8 points in the previous quarter. Domestic demand excluding inventories also turned positive, adding 0.1 point after subtracting 0.2 point in Q1. Household consumption edged up 0.2%, following a 0.3% decline in the first three months of the year, supported by spending on manufactured goods and services. However, households cut back on food and sharply reduced consumption of refined petroleum products and energy. Public administration spending rose 0.4%, accelerating from 0.3% in the previous quarter. Total production of goods and services increased 0.3%, with market services accelerating to 0.6% growth while manufacturing output slowed to 0.1%.

Domestic demand (excl. stocks)0.1

Net exports0.6

Domestic demand (excl. stocks)

0.1 pp

Net exports

0.6 pp

Data from the article text

International comparisons

France's 0.2% growth matched that of Germany and Italy, the other two largest eurozone economies. Spain outperformed with a 0.7% expansion, while Ireland recorded a 3.9% surge. The French performance, while modest, kept pace with its peers and avoided the recession that some experts had feared just weeks earlier.

France0.2%

Germany0.2%

Italy0.2%

Spain0.7%

Ireland3.9%

France

0.2 %

Germany

0.2 %

Italy

0.2 %

Spain

0.7 %

Ireland

3.9 %

Data from the article text

Official reaction

Economy Minister Roland Lescure welcomed the figures in an interview on France Inter.

“It's good news. It proves that in the face of headwinds, the French economy has resisted.”

The minister's comments reflected relief that the economy had not slipped into a downturn, though the growth rate remained fragile. With accumulated growth of 0.5% at mid-year, the French economy would need to avoid stagnation in the second half to achieve any meaningful annual expansion. The first estimate remains provisional and may be revised in the coming months.