FX.co ★ France GDP stalls at 0.1% in Q3 as recovery loses momentum

France’s economy grew by just 0.1% in the third quarter, according to estimates from the national central bank. The euro area’s second‑largest economy showed only a modest pickup after three months of stagnation. Activity in the services sector prevented output from slipping into negative territory, offsetting declines in construction, manufacturing, and agricultural sectors.

A survey of 8,500 company executives revealed mounting strains in the business environment. Industrial support came only from orders in aerospace and in electrical equipment for data center construction, while growth slowed across other sectors. Firms faced sharp rises in energy, metal, and fuel costs but, amid weak demand, were unable to fully pass those expenses on to consumers. As a result, liquidity deteriorated, and restaurants and service companies reported falling revenues and payment delays.

Against the backdrop of soaring fuel prices, the managers’ uncertainty index jumped for the first time since spring. Companies are freezing investment projects, and households are switching to a more frugal stance. In October, the regulator expects further cooling in services and a sharp slump in auto production due to supply chain disruptions. Such slow recovery rates threaten the government’s plans to reduce the budget deficit and exit the prolonged crisis.