While the Standard & Poor’s agency must deliver its verdict this Friday, May 29 on France’s rating, the French economy is deteriorating further. INSEE has published its economic report for the first quarter of 2026. Growth, inflation, consumption… All the lights are red.
The government refuses to give in to alarmism, but the figures, published by INSEE this Friday, are cruel. In the first quarter, GDP fell by 0.1% compared to the fourth quarter of 2025.
The war in the Middle East is causing energy prices to soar, which has an impact on inflation. After 2.2% in April, the average price level increased by 2.4% compared to May 2025. Household consumption, for its part, fell.
“We have a form of rupture in French activity”
All these elements paint a worrying picture according to Mathieu Plane, economist at the OFCE. “We have a form of rupture in French activity which had held up rather well throughout 2025. As long as the geopolitical situation remains like that, the hardest part is ahead of us,” he analyzes. HAS
“The first quarter was worse than we expected. However, the second quarter will not be good: we have a negative impact on the purchasing power of households. We have production costs that go to businesses and margins that are reduced. So, we cannot clearly see the levers of growth, neither through consumption nor through investment”, he explains at the microphone of Europe 1.Â
If GDP declines further in the second quarter, France will then enter a recession, a situation that the country has not experienced since 2020, during the health crisis.
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