The French central bank expects GDP to return to mild growth in Q4 but says
political, fiscal and social uncertainty has risen markedly. A monthly survey of
8,500 firms showed industrial and services activity expanded in October and is
expected to continue in November, while construction is near stagnation. Firms
flagged greater concerns about the political situation, public finances and fuel
prices; firms and households are becoming more cautious, delaying projects and
lengthening decision cycles, making the near-term business outlook more
uncertain. Pass-through of higher input costs is limited—only 12% of industrial
firms and 9% of service firms raised prices in October. Governor Emmanuel Moulin
said recent data have been weak and the bank may cut its 2026 growth forecast,
currently 0.4%. France has not recorded quarterly growth so far this year and
narrowly avoided a recession.
