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France's Economy Grows 0.1% in Q1 2025, Avoiding Recession

Growth was driven by inventory accumulation, while domestic demand, investment, and trade showed continued weakness.

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General view of the Eiffel Tower and the Paris skyline at sunset from the Montparnasse Tower in Paris, France, March 19, 2025. REUTERS/Abdul Saboor/File Photo
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Overview

  • France's GDP grew by 0.1% in Q1 2025, following a 0.1% contraction in Q4 2024, avoiding a technical recession.
  • The slight growth was primarily fueled by a 0.5 percentage-point boost from inventory accumulation as companies stocked up.
  • Household consumption and final domestic demand were stagnant, reflecting ongoing consumer spending challenges.
  • Investment, measured by gross fixed capital formation, declined by 0.2%, indicating continued reluctance to invest.
  • Foreign trade negatively impacted growth, with exports falling 0.7% and imports rising 0.4%, subtracting 0.4 percentage points from GDP.