France’s economy outpaced expectations in the third quarter, driven by a strong rise in exports, largely from the aerospace sector, and a rebound in corporate investment, despite ongoing political uncertainty, according to official data released last week.
The eurozone’s second-largest economy grew by 0.5%, up from 0.3% in the previous quarter, outperforming both Germany and Italy, whose economies remained flat during the same period.
France’s Q3 economic growth significantly exceeded economists’ expectations, with the consensus forecast at just 0.2% and none of the 26 Reuters-surveyed analysts predicting a figure above 0.3%.
Furthermore, according to a preliminary GDP report from the national statistics agency INSEE, exports rose 2.2% compared with the previous quarter, while imports declined 0.4%, contributing 0.9 percentage points to overall growth.
The boost from exports more than compensated for a decline in business inventories, which subtracted 0.6 percentage points from growth. Companies reduced stock levels during the quarter to accelerate shipments ahead of the Trump administration’s new 15% tariffs on EU imports, Reuters news agency reports.
At the same time, corporate investment rose 0.9%, helping to counterbalance sluggish consumer spending, which increased by just 0.1%, a notable slowdown for France’s traditional growth driver.
France’s political turmoil intensified in the third quarter when opposition parties forced out President Emmanuel Macron’s previous prime minister, just as the government was preparing to submit its 2026 budget to parliament, prompting downgrades from three credit rating agencies.
A new minority government, led by Macron loyalist Sebastien Lecornu, is now racing to pass the budget in France’s fragmented parliament, where proposed amendments could potentially increase corporate taxes by billions of Euros if approved by the Senate.
“Despite political upheavals and international uncertainties, our companies are investing, exporting, and driving the country forward,” Finance Minister Roland Lescure said in regard to the GDP data, which he defined as “remarkable.”
“The swift adoption of a budget that preserves the confidence of businesses and households will be crucial to maintaining this momentum,” he went on to say.
Economists noted that the robust Q3 performance has sparked optimism that the French economy may stay relatively resilient despite ongoing political instability.
“Political and budgetary uncertainty is likely to weigh on growth momentum. Still, improving business sentiment and consumer confidence in October suggest the impact could be smaller or delayed,” according to ING senior economist Charlotte de Montpellier.