French Economy Shrinks as Debt Worries Mount

By Ed Frankl

France's economy contracted in the third quarter of the year, deepening concerns over the government's debt load amid enduring political paralysis.

Gross domestic product, a measure of the goods and services produced in an economy, fell back 0.1% during the three months through September, after stagnation recorded in the second quarter, France's statistics agency said Friday.

Quarterly GDP hasn't grown since the final three months of 2025, having also sunk 0.2% in January through March this year. Economists polled last week by The Wall Street Journal had expected the economy to grow marginally in the third quarter.

The parlous state of France's public finances, alongside the deadlock in its fractured parliament, has led to bond yields on the country's sovereign debt soaring to multidecade highs.

The International Monetary Fund earlier in October downgraded its expectations for French growth this year to 0.4%, down from 0.9% in April, and warned that the country needed to get its public finances in order.

The immediate outlook for growth looks bleak as uncertainty mounts. Business activity as measured by purchasing managers' data sank back into contraction in October, according to a survey of firms that also showed the most pessimistic assessment of the French economic outlook in six-and-a-half years.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

October 30, 2026 02:46 ET (06:46 GMT)