French economy shrank by 0.1% in first quarter

France's economy shrank slightly in the first quarter, final data from statistics office INSEE showed on Friday, missing the preliminary reading of 0.0% for the euro zone's second-largest economy.

The statistics office reported a result of -0.1%, below the average forecast of 0.0% in a Reuters poll of 19 economists.

Exports dropped 3.5% after a 0.9% rise in the previous quarter, weighed down by a decline in aeronautical exports, the statistics office said.

Household consumption, the traditional driver of French growth, dropped 0.2% after a 0.3% increase in the fourth quarter of 2025, hit by a drop in energy consumption.

Growth in France, like in much of Europe, has been hit by a series of external shocks over the past year, including a tariff dispute with the United States that has weighed on exports, while the U.S.-Israeli war with Iran has pushed up oil prices and dampened tourism.

France's unemployment rate rose to 8.1% in the first quarter of 2026, its highest since 2021 during the COVID-19 pandemic.

France's economy ended 2025 with a modest slowdown in growth, but expanded 0.9% throughout the year, outperforming the 0.7% assumption used in government budget planning.

(Reporting by Dimitri Rhodes in Gdansk, editing by Milla Nissi-Prussak)

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This story was originally published May 29, 2026 at 3:22 AM.