France’s economy recorded zero growth in the first quarter of this year due to “weak” domestic demand and a “strongly” negative contribution from foreign trade, the national statistics agency INSEE said on Thursday.
The first estimate of gross domestic product (GDP) for the first quarter shows the impact of the war in the Middle East, which began on February 28.
As recently as two weeks ago, the central bank of France estimated growth of up to 0.3 percent in the January-March period, while INSEE reduced its forecast from 0.3 to 0.2 percent at the end of March.
In the last quarter of 2025, the French economy grew by 0.2 percent.
INSEE states that domestic demand is “weak”, with a slight decline in household consumption, which negatively affected growth in the first quarter (-0.1 percentage point), after contributing to growth in the previous quarter.
Foreign trade had a “strongly” negative impact of 0.7 percentage points, with a sharp drop in exports.
In mid-April, France slightly lowered its annual growth forecast to 0.9 percent, down from 1.0 percent earlier, due to the economic fallout from the conflict in the Middle East.
Finance Minister Roland Lescure said at the time that a “very moderate” impact on growth was expected, and that inflation would remain contained despite energy shocks and rising oil prices.
However, according to INSEE data, consumer prices rose by 2.2 percent year-on-year in April, following a 1.7 percent rise in March.
This growth was driven by a sharp increase in energy prices, which rose by 14.2 percent compared to the same period last year, further boosted by a jump in global oil prices due to the conflict in the Middle East.
(Vijesti.ba)
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