France GDP growth forecast lowered to 0.4% in 2026 by Insee
The French economy is losing ground as the main domestic demand engine stalls. Statistics office Insee has cut its 2026 GDP outlook from 0.7% to 0.4%, highlighting weak household consumption and falling investment.
Insee warns that France is diverging from its European neighbors due to stalled domestic demand. The institute forecast a 0.7% GDP increase for 2026 but has sharply revised this down to 0.4%. This follows a first-quarter decline of 0.2% and flat activity in the second quarter of 2026. Consumption remains weak, and investment is dropping because public projects are slowing due to the upcoming municipal election cycle. In addition, agriculture faces severe heatwaves, and labor market conditions are worse than across Europe with rising unemployment and stagnant wages. Public finance deterioration further restricts budgetary support. While activity is expected to rise slightly in the third quarter by 0.1% according to the latest forecasts, France continues to lag behind Germany, Italy, Spain, and the United Kingdom during the first two quarters of 2026.
