France's economy decreased by 0.1% in the third quarter of this year, according to official data. This decline has fueled concerns about public finances and political tensions in the second-largest economy of the European Union.
Details of GDP Growth
France's Gross Domestic Product (GDP) decreased by 0.1% in the three months ending in September. This follows a halt in economic growth in the second quarter and a 0.2% decline observed in the first quarter. Statistics released by the National Institute of Statistics and Economic Studies (Insee) confirm this situation.
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Analysts believe that these figures will make it difficult for the government to achieve its growth forecast of 0.5% for this year. Furthermore, forecasts suggest that this figure may drop to 0.4%, which was expected by Insee and the Bank of France.
Impact of Investment and Foreign Trade
According to Insee's report, the production of goods and services in France decreased by 0.1% from July to September, while household consumption increased by 0.4%. Additionally, investment faced a decline of 0.6%, and foreign trade has negatively impacted economic growth, reducing GDP growth by 0.6%.
Concerns surrounding France's high debt and budget deficit have led to a significant increase in the yield of the country's government bonds in recent weeks. The budget plan for 2027, presented last month, failed to meet expectations, adding to worries about continued high government spending ahead of next year's presidential elections. Polls indicate that Marine Le Pen, a far-right candidate known as a financial populist, could win the election.
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