France's Economy Shows Modest Growth Amid Budget Challenges

France's economy grew by 0.3% in the second quarter, according to INSEE, matching expectations. Export growth, particularly in pharmaceuticals, and stable household consumption contributed to this slight increase. Prime Minister Francois Bayrou aims to reduce the budget deficit, with plans facing a confidence vote on September 8.

France's economy experienced modest growth in the second quarter, expanding by 0.3% as per the final data released by INSEE. This aligns with prior estimates and highlights a resurgence in export activities, notably within the pharmaceutical sector.

Despite the growth, household consumption remained relatively flat, offsetting declines in energy spending. Dietary and service expenditures exhibited resilience, contributing marginally to economic stability.

Looking ahead, quarterly growth is expected to stabilize at 0.2% for the rest of the year. Prime Minister Francois Bayrou plans to address France's high budget deficit, with key fiscal targets aiming for a reduction to 4.6% of GDP by 2026 and compliance with the EU's 3% limit by 2029. His efforts face scrutiny during the upcoming September confidence vote.

(With inputs from agencies.)