France’s economy is expected to expand in Q3 at roughly the same rate as in the previous quarter, supported by growth in manufacturing and services, the country’s central bank reported on Monday in its monthly business survey.

According to the Bank of France, GDP is projected to rise by about 0.3%, following reports from business leaders of increased activity in transportation equipment, aerospace, and automotive industries early in the quarter.

The survey found that construction activity expanded more than expected in July and is likely to keep growing in August, despite limited public contracts and uncertainty surrounding a government initiative aimed at encouraging the shift to low-carbon energy.

This year, the eurozone’s second-largest economy has been challenged by ongoing political instability at home and the threat of US trade tariffs on the bloc, Bloomberg reports.

Although growth accelerated unexpectedly to 0.3% in the second quarter, it was largely driven by inventory buildup, while domestic demand stayed subdued.

A Bloomberg survey of 28 economists conducted in early August and released at the beginning of the week indicated expectations for the French economy to grow only 0.1% in the current quarter, followed by 0.2% in the final quarter of the year.

The Bank of France has previously forecast GDP growth of 0.6% in 2025, down from 1.2% in 2024.

The central bank noted that its uncertainty indicator, derived from feedback from 8,500 companies, continued to fall, though it remained elevated in the industrial sector due to vulnerability to trade tariffs.

The Bank of France reported that business leaders in sectors such as chemicals, agri-food, and wine specifically pointed to tariff threats as a concern.

While a preliminary trade agreement between the European Union and the US last month could offer some added stability, political risks persist, with the government facing the possibility of another collapse later in the year as it seeks parliamentary approval for sweeping spending cuts and tax hikes aimed at reducing the budget deficit.