Financial News: French Economy Shrinks Unexpectedly On Weak Investment, Ex

French Economy Shrinks Unexpectedly On Weak Investment, Exports

10/30/2026 - 03:28:00 (RTTNews)

(RTTNews) - The French economy contracted unexpectedly in the third quarter on weak investment and exports, amid high borrowing costs and social unrest clouding the outlook.

Gross domestic product fell 0.1 percent sequentially after stagnating in the second quarter, preliminary data from the statistical office INSEE revealed Friday. Economists had forecast the economy to expand 0.1 percent.

The expenditure-side of GDP showed that foreign trade and the fall in gross fixed capital formation contributed to the contraction in the third quarter.

The growth in household consumption accelerated to 0.4 percent from 0.2 percent and government spending climbed 0.3 percent but slower than the 0.4 percent rise seen a quarter ago.

Meanwhile, gross fixed capital formation declined 0.6 percent, bigger than the 0.5 percent drop posted in the prior quarter.

The contribution of foreign trade to growth was negative 0.6 points as exports fell back by 1.7 percent after a 2.8 percent gain, while imports rose 0.1 percent, following a 0.9 percent increase.

Data showed that the contribution of changes in inventories to GDP growth was positive 0.4 points in the third quarter, in contrast to -0.7 points in the prior period.

Household spending dropped for the second straight month in September, the statistical office said in a separate communiqué. Household consumption decreased unexpectedly by 0.5 percent, the same pace of decline as seen in August. Spending was forecast to grow 0.2 percent.

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