France's economy unexpectedly shrinks as its economy minister warns the country will 'hit the wall' without €43bn of savings
Emmanuel Macron whose government's borrowing costs jumped to 4.944% on 10-year bonds after GDP shrank 0.1% — a contraction analysts had forecast as a 0.1% rise.A data graphic on France's economic performance, as investment contracted for a second consecutive quarter alongside the export slump.Riot police and protesters clashing on a Paris street on 24 October, as nationwide demonstrations over the cost of living are expected to resume on Saturday after that night's unrest was described as some of France's…Roland Lescure, whose finance ministry oversaw a period in which the eurozone as a whole grew 0.4% in Q3 2026 — double economists' forecasts — while France's economy shrank for the second time this year.
France's GDP contracted by 0.1% in Q3 2026 — its second decline this year — as exports fell 1.7%, investment dropped 0.6%, and a wave of nationwide protests unsettled business confidence. Economy Minister Roland Lescure pointed to an "unprecedented combination" of extreme summer heat, surging energy prices driven by the Iran war, and deep political paralysis over France's swelling budget deficit.
French 10-year bond yields climbed to 4.944% following the GDP release, with the country's borrowing costs already ranking among the euro zone's highest.
Lescure is pressing parliament to approve a €43bn savings package for 2027; should the legislation fail, Prime Minister Sébastien Lecornu could be forced to use constitutional powers to push it through without a vote — a move that would risk provoking a no-confidence motion.
France's contraction stands as a sharp outlier: Spain expanded by 0.6% over the same period, and the broader eurozone grew 0.4% — well ahead of the 0.2% economists had forecast.
