France: Economic growth ebbs in the fourth quarter of 2025
Slowdown in line with market expectations: In line with market expectations of a deceleration, France’s GDP grew 0.2% on a seasonally adjusted quarter-on-quarter basis in Q4, following a 0.5% expansion in the prior quarter.
In seasonally adjusted annual terms, GDP growth accelerated to an over one-year high of 1.1% (Q3: +0.9% yoy), marginally undershooting market expectations.
Accordingly, GDP growth came in at a nine-year low—barring 2020’s pandemic-related contraction—of 0.9% in 2025 as a whole, falling short of 2024’s 1.1% expansion.
Fixed investment caps momentum: Compared with the previous period’s data, readings in Q4 softened for government consumption (+0.3% in seasonally adjusted quarter-on-quarter terms vs +0.7% in Q3), fixed investment (+0.2% vs +0.7% in Q3), exports of goods and services (+0.9% vs +3.2% in Q3) and imports of goods and services (-1.7% vs +1.5% in Q3). The slowdown in fixed investment was driven by weaker outlays on transport equipment, capital goods and construction, likely tied to persistent political and economic uncertainty during the quarter. In contrast, the reading for private consumption improved in Q4, following two quarters of near-stagnation (+0.3% vs +0.1% in Q3), aided by faster growth in goods spending and a further rise in services consumption. Moreover, net trade provided a significant boost to growth, despite easing export growth, as imports fell in the fourth quarter.
GDP growth to stabilize ahead: Sequential GDP growth is seen as broadly stable in the coming quarters, weighed down by persistent political uncertainty. In 2026 as a whole, our panelists expect GDP growth to hover around 1%, undershooting both the prior-decade mean and the euro area average as fiscal consolidation efforts and political instability continue to constrain momentum. That said, household consumption should offer some support amid below-target inflation. A government collapse poses a downside risk, threatening to unwind recent pro-business reforms adopted by President Macron.
Panelist insight: ING’s Charlotte de Montpellier commented on the outlook:
“Overall, the 2026 outlook is moderately positive. […] Business sentiment is improving, particularly in industry, supported by the broader European rebound and the German stimulus plan. Industrial firms report better activity prospects and improving order books. Defence spending will continue to support the sector, and aeronautical exports should remain a key growth engine, provided production capacity keeps pace. However, if it continues, the recent appreciation of the euro could weigh on exports and thus on French activity.”