Overview

• Insee reported a 0.3% rise in French GDP in Q2 2025, outpacing economists’ 0.1% forecast.
• Inventories contributed the bulk of the expansion, concealing deeper softness in consumer and business spending.
• Household consumption ticked up 0.1% but business investment contracted by 0.4%, underscoring weak internal demand.
• Trade weighed on growth as exports underperformed and a preliminary EU-US tariff deal adds uncertainty over future trade costs.
• Prime Minister Francois Bayrou’s coalition remains without a parliamentary majority and faces strains meeting EU deficit targets as new military spending commitments limit fiscal leeway.