Final domestic demand excluding inventories was sluggish: household consumption declined slightly to -0.1 per cent after +0.4 per cent, and gross fixed capital formation fell back to -0.4 per cent after +0.3 per cent. Overall, the contribution of domestic demand, excluding inventories, to GDP growth was zero this quarter, after +0.4 percentage points in Q4 FY25.
France’s GDP stalled in Q1 FY26 at 0.0 per cent, as weak domestic demand offset gains in manufacturing, as per its national statistics office.
Household consumption and investment declined, contributing nothing to growth.
Net exports dragged heavily at -0.7 points due to a sharp fall in exports.
Inventory rebuilding added +0.8 points, preventing contraction.
The contribution of foreign trade to growth was strongly negative this quarter at -0.7 points following a contribution of +0.6 points: exports fell sharply to -3.8 per cent after +0.8 per cent, while imports declined again to -1.7 per cent after -0.8 per cent.
Finally, the contribution of inventory changes to GDP growth was strongly positive this quarter at +0.8 points after -0.7 points in Q4 FY25.
In the first quarter of fiscal 2026, total production of goods and services was once again sluggish, rising by 0.1 per cent, after +0.2 per cent in Q4 FY25.
Production of market services excluding construction slowed slightly to +0.2 per cent after +0.3 per cent, dragged down by transportation services, which fell by -0.6 per cent after -0.2 per cent, Insee said in its report.
Production in the manufacturing industry rebounded sharply this quarter to +0.7 per cent after -0.3 per cent. It was driven by the production of other transportation equipment to +4.0 per cent after 0.0 per cent, particularly in the aerospace industry, both for aircraft engines and for airframes. Production also recovered in other manufactured goods to +0.3 per cent after -0.5 per cent and in capital goods to +0.5 per cent after -0.2 per cent.
Finally, production in energy, water, and waste management went down sharply to -1.8 per cent after +0.7 per cent, in line with demand.
The contribution of foreign trade to GDP growth was strongly negative in the first quarter of 2026 at -0.7 percentage points, following +0.6 percentage points in the previous quarter. Exports declined sharply in the first quarter of 2026 to -3.8 per cent after +0.8 per cent. On the goods side, exports of transport equipment fell sharply to -20.1 per cent after +4.7 per cent, particularly in the aerospace sector, following two dynamic quarters. Finally, exports of services declined again to -0.7 per cent after -0.3 per cent.
Imports continued to decline to -1.7 per cent after -0.8 per cent. Imports of manufactured goods fell sharply to -2.1 per cent after -1.1 per cent, weighed down by imports of aerospace and naval products to -19.4 per cent after -0.3 per cent and other manufactured goods to -1.1 per cent after -2.8 per cent. Imports of energy, water, and waste fell back sharply to -6.5 per cent after +0.2 per cent, particularly imports of crude petroleum products and natural gas.
Finally, on the services side, imports declined again to -1.1 per cent after -0.4 per cent.
The contribution of inventory changes to GDP growth was positive this quarter by +0.8 percentage points, following -0.7 percentage points, driven mainly by aerospace products, following significant inventory destocking in the previous two quarters.
Fibre2Fashion News Desk (RR)
