Final data published by the statistics office INSEE show that France's economy contracted by 0.1% in the first quarter of 2026. This final reading was lower than the preliminary 0.0% figure and below the average expectation of 0.0% in a poll of 19 economists.
The report highlighted several specific contributors to the shortfall. Exports fell sharply, dropping 3.5% in the quarter after a 0.9% increase in the previous three months. INSEE attributed part of the decline in exports to weaker aeronautical shipments.
Household consumption also eased, decreasing by 0.2% in the quarter. That followed a 0.3% rise in consumption in the fourth quarter of 2025. INSEE noted that lower energy consumption was a key factor in the slowdown in household spending, which traditionally underpins French growth.
Broader external pressures were cited as headwinds to growth. The statistics office pointed to a tariff dispute with the United States that has weighed on exports. In addition, the U.S.-Israeli war with Iran has been associated with higher oil prices and weaker tourism, factors that have affected activity.
Labour market indicators also worsened in the quarter. The unemployment rate rose to 8.1% in the first quarter of 2026, reaching its highest level since 2021, during the COVID-19 pandemic.
Looking at the full year, France finished 2025 with a modest slowdown in momentum but still expanded by 0.9% across the year. That outcome exceeded the 0.7% growth assumption used in government budget planning for 2025.
Key elements of the INSEE release at a glance:
- Quarterly GDP: -0.1% (final) versus preliminary 0.0%.
- Forecast comparison: below the 0.0% average forecast from a poll of 19 economists.
- Exports: -3.5% after a +0.9% rise in the prior quarter, with a notable fall in aeronautical exports.
- Household consumption: -0.2% following a +0.3% increase in Q4 2025, driven in part by lower energy consumption.
- Unemployment: 8.1% in Q1 2026, the highest since 2021.
- Full-year 2025 growth: +0.9%, above the 0.7% assumption in government budget planning.
The INSEE release frames the contraction in the context of a series of external shocks over the past year that have affected France and much of Europe. Those shocks include the tariff dispute with the United States and the U.S.-Israeli war with Iran, which INSEE links to higher oil prices and weaker tourism.
Overall, the data depict an economy that softened at the start of the year, with trade and household energy consumption acting as immediate drags and the labour market showing signs of strain.