France's Economy Stagnates as GDP Revised Downward

France's economic growth was zero in the second quarter, according to data released Friday by the national statistics institute, Insee. This figure is a downward revision from the initial estimate of 0.2 percent growth. Additionally, the first quarter of the year was revised to a 0.2 percent contraction, compared to a previously estimated 0.1 percent drop. Economy Minister Roland Lescure described the situation as the first concrete impact of a horrible summer, noting that extreme heat and droughts severely damaged agricultural production. The government estimates the cost of these weather events at approximately 15 billion euros.

Other economic indicators show further strain. Inflation rose to 2.4 percent in August, and the public deficit remains stagnant at 5.1 percent of the gross domestic product, which is well above the 3 percent limit set by the European Union. These figures complicate the budget preparations for Prime Minister Sébastien Lecornu, as the government had previously hoped for a 0.7 percent growth rate for the year. While one report notes a slight recovery in household consumption of 0.3 percent in the second quarter, another report highlights a decline in household purchasing power of 0.6 percent during the same period.

The current economic climate comes as France prepares for the 2027 presidential elections. The government is expected to introduce budget cuts to address the deficit and avoid corrective measures from the European Commission.