French economy 'at a standstill' as budget uncertainty raises recession risk | Euronews

A poor performance. French gross domestic product fell by 0.1% in the third quarter, the National Institute of Statistics and Economic Studies (Insee) said on Friday, after stagnating in the second quarter and a 0.2% decline in the first.

It is another blow for the government, coming as France's borrowing costs climbed above 5% on the financial markets last week and social tensions remain explosive, on the eve of another nationwide day of mobilisation against the high cost of living and in support of young people's demands.

This fall in activity effectively puts the euro area's second-largest economy on the brink of recession. At the same time, inflation accelerated to 3.4% year on year in October, from 3.1% in September. That is its highest level since January 2024, according to Insee.

The poor figures do not come as a surprise to experts, against a particularly unfavourable macroeconomic backdrop. "France is very likely to experience a technical recession in the coming quarters" , Jérémie Peloso, chief strategist for Europe at BCA Research, told Euronews.

"This scenario was already conceivable before the recent budget turbulence and the collapse of the...