French output shrinks and inflation accelerates, leaving economy at standstill, minister says
SPY•French GDP fell 0.1% in the third quarter, against expectations for 0.1% growth, while October inflation reached 3.8%, above the 3.6% forecast. Economy Minister Roland Lescure said the economy was at a standstill due to external and internal shocks.
1. GDP contracts, inflation rises
France's preliminary GDP fell 0.1% in the third quarter, while analysts had expected a 0.1% rise. Harmonized year-on-year inflation accelerated to 3.8% in October, its highest level since late 2023, as high energy prices and increases in accommodation and transport services drove prices higher, statistics office INSEE said.
2. Minister cites economic shocks
“The conclusion to all this is that, by 2026, the French economy is at a standstill due to an unprecedented combination of external and internal shocks,” Economy Minister Roland Lescure said in an interview with public broadcaster franceinfo. French 10-year bond yields rose 6 basis points to 4.944% after the GDP data, underperforming the rest of the euro zone.
3. Exports and investment fall
Exports fell 1.7%, including a 9.1% decline in transport equipment exports, with aerospace the main negative driver. Investment fell 0.6%, while household consumption rose 0.4%; INSEE said purchases of electric vehicles helped lift transport-equipment consumption.
