French economy stagnated in second quarter, lagging estimates

France's ‌economy remained ​stable in the second quarter, final data from statistics office INSEE showed on Friday, below ‌the preliminary reading of a 0.2% rise for the euro zone's second-largest economy.

The statistics office reported a result of 0.0%, also missing the ‌average forecast of +0.2% in a Reuters poll of 23 economists. Exports rose ‌sharply to +2.9% after -3.0% in the previous quarter, driven by a strong rebound in aeronautical exports, the office said.

Household consumption, the traditional driver of French growth, also ⁠rebounded ​to +0.3% from -0.3% in ⁠the first quarter of 2026, boosted by a rise in consumption of food, ⁠energy and manufactured goods. Domestic consumer spending was resilient through July as well, while ​buyers' confidence remained steady for the last two months. Growth in France, ⁠like in much of Europe, has been hit by a series of external ⁠shocks ​over the past year, including a tariff dispute with the United States that has weighed on exports, while the U.S.-Israeli ⁠war with Iran has pushed up oil prices and dampened tourism.

On top ⁠of the ⁠slow economic growth, France is grappling with a high budget deficit while pushing for European rearmament and AI ‌innovations.