FX.co ★ French Economy Rebounds in Q2

France’s economy returned to growth in the second quarter of 2026, expanding by 0.2% quarter-on-quarter, in line with market expectations, after a revised 0.1% contraction in the previous quarter, according to preliminary estimates. The recovery was primarily driven by net trade, which added 0.6 percentage points to GDP growth, as exports rebounded by 2.6% following a 3.1% drop in Q1, outpacing a 0.8% rise in imports.

Final domestic demand excluding inventories also turned positive, contributing 0.1 percentage points to growth after subtracting 0.2 points in Q1. This improvement reflected a recovery in household consumption (+0.2% vs. -0.3%) and stronger government spending (+0.4% vs. +0.3%).

By contrast, gross fixed capital formation fell for a second consecutive quarter (-0.3% vs. -0.8%), indicating ongoing weakness in investment, while changes in inventories weighed on activity, subtracting 0.6 percentage points from growth.

On an annual basis, GDP grew by 0.7%, down from a revised 0.8% in Q1, marking the slowest year-on-year expansion since the contraction recorded in the fourth quarter of 2020.