French GDP Holds at 0.0% in Q2 After Contracting 0.2%
Key Facts
French gross domestic product was unchanged in the second quarter of 2026 after contracting in the first three months of the year, according to data from France’s National Institute of Statistics and Economic Studies (INSEE). The figures showed quarterly growth of 0.0% in Q2, compared with a 0.2% contraction in Q1. They provide a backdrop for assessing the state of the French economy as attention turns to activity indicators and upcoming official data. An initial report on private-sector activity had pointed to an improvement in September, but activity data do not change what the national accounts showed about Q2 growth.
France’s preliminary composite Purchasing Managers’ Index rose to 51.2 points in September from 48.5 points in August, according to a Reuters report carried by MarketScreener. The report described the pace of growth as the fastest in more than two years. But S&P Global’s chief economist cautioned that continued improvement was not guaranteed, noting that new orders had barely risen and companies’ expectations for activity had weakened. He said, "The sustainability of this expansion is in doubt, given the slight increase in new orders and the deterioration in companies’ expectations for activity."
In manufacturing, an S&P Global economist said French industrial activity grew in September despite accelerating inflation, an escalating energy-market crisis and tighter financial conditions. He also pointed to a fall in new orders and weak prospects, two factors that raise questions about the expansion’s ability to continue. He said, "The French industrial sector managed to grow in September despite rising inflation, the worsening energy-market crisis and tighter financial conditions." These signals place the improvement in activity against simultaneous pressures on businesses, without settling the direction of performance in the months ahead.
INSEE’s business-climate data present a cautious picture of activity in October, with the overall index at 98 points and the services index at 99 points. On prices, French consumer prices rose 3.1% year on year in September, following a 2.4% increase in August, according to the institute. INSEE is scheduled to publish preliminary consumer price index results for October on October 30. It will also release household goods consumption data for September that day. The releases follow Q2’s unchanged output and will add more recent measures of prices and domestic demand.
The data precede the European Central Bank’s Governing Council meeting on October 29, according to the bank’s calendar. A Reuters report on October 20 said traders expected rates to remain unchanged at the October meeting, while pricing an 87% probability of a rate increase in December, based on data compiled by LSEG. The meeting comes before INSEE publishes its preliminary Q3 national accounts estimate on October 30, along with price and consumption data. The verified facts available here do not include a reading for French October PMIs or the European equity performance attributed to them in the initial draft.