FX.co ★ France Q1 GDP Growth Below Estimates

In the first quarter of 2025, the French economy experienced a modest growth of 0.1% quarter-on-quarter, effectively recovering from the previous quarter's 0.1% decline, according to preliminary data. However, this growth fell short of market expectations, which predicted a 0.2% increase. Positive contributions to the GDP came from changes in inventory (0.5 percentage points), while net trade remained a negative factor and final domestic demand had no impact. Household consumption remained unchanged from the previous quarter at 0.2%, as decreased goods purchases were balanced by increased spending on services. Government spending growth slowed to 0.1%, down from 0.4% in the previous quarter. Fixed investment saw a further reduction of 0.2%, compared to a 0.1% decline previously, mainly due to ongoing weaknesses in the construction sector and manufactured goods. Export levels fell significantly by 0.7%, in contrast to a 0.2% rise in the previous quarter, whereas imports continued their ascent, growing by 0.4% compared to 0.5% earlier. On an annual basis, the economy expanded by 0.8%, aligning with the upwardly revised figure for the fourth quarter and marginally surpassing the projected growth of 0.7%.