France’s Economy Expands 0.5% in Q3, Beating Forecasts as Exports Surge
France’s economy grew 0.5% in the third quarter, surpassing forecasts as strong exports from the aeronautics sector and higher corporate investment helped offset weak consumer spending and ongoing political instability, according to official data released on Thursday.
Economists surveyed by Reuters had expected a milder 0.2% increase from the previous quarter, when the eurozone’s second-largest economy expanded 0.3%.
Exports Drive Growth Despite Political Turmoil
France’s national statistics agency INSEE reported that exports jumped 2.2% in the third quarter compared to the previous one, while imports fell 0.4%. As a result, foreign trade contributed 0.9 percentage points to overall GDP growth.
The export surge was largely fueled by increased aerospace shipments, as companies accelerated deliveries ahead of the Trump administration’s new 15% tariffs on goods from the United States. This rush led to a reduction in business inventories, which subtracted 0.6 percentage points from growth during the quarter.
Investment Offsets Weak Consumer Demand
Corporate investment rose 0.9%, helping counter a slowdown in household consumption, which grew only 0.1%—a historically weak pace for France’s domestic demand.
The third quarter also saw France enter a deeper political crisis, as opposition parties ousted President Emmanuel Macron’s former prime minister just as the government prepared its 2026 budget. The turmoil triggered credit rating downgrades from three major agencies.
Despite the challenges, the newly appointed minority government led by Sebastien Lecornu is pushing to pass the budget through a divided parliament. Lawmakers have introduced amendments that could increase corporate taxes by several billion euros if approved by the Senate.
Government Response and Outlook
Finance Minister Roland Lescure praised the data, calling the performance “remarkable.”
“Despite political upheavals and global uncertainties, our companies are investing, exporting, and driving the country forward,” he said.
Lescure added that passing a budget that maintains business and consumer confidence will be vital to sustaining France’s current growth momentum.
