French economy stagnated in second quarter, lagging estimates

France’s economy was effectively flat in the second quarter, with final data from INSEE showing growth of 0.0%, below both the preliminary euro-zone comparison of +0.2% and the Reuters poll’s average forecast of +0.2%. The report noted exports rebounded sharply to +2.9% after -3.0% in the previous quarter, helped by a strong recovery in aeronautical exports. Household consumption, a traditional driver, also improved to +0.3% from -0.3% in Q1, supported by higher spending on food, energy and manufactured goods. Despite resilient consumer spending through July, France faces headwinds from external shocks, a high budget deficit, and efforts tied to European rearmament and AI innovation.