PARIS (Reuters) -France’s economy grew 0.5% in the third quarter, faster than forecast, as exports surged mainly due to shipments from the aeronautics industry and higher corporate investments despite a political crisis, official data published on Thursday showed.
Economists polled by Reuters had, on average, forecast 0.2% growth from the second quarter when the euro zone’s second-biggest economy had expanded 0.3%.
The national statistics office INSEE said in a preliminary GDP report for the period that exports jumped 2.2% in the third quarter from the previous quarter while imports fell 0.4%, which meant foreign trade boosted growth by 0.9 percentage points.
The surge in exports led to a drop in businesses inventories, which knocked 0.6% percentage points off growth in the quarter, as firms rushed to ship out finished products ahead of the Trump administration’s new 15% tariffs on goods from the United States.
CORPORATE INVESTMENT OFFSETS WEAK CONSUMER SPENDING
Meanwhile, corporate investment grew 0.9% in the quarter, helping to offset weak growth of just 0.1% for consumer spending – France’s traditional motor for growth.
France sank deeper into political crisis during the third quarter as opposition parties ousted President Emmanuel Macron’s previous prime minister just as the government was preparing to send its 2026 budget to parliament, triggering downgrades from three ratings agencies.
A new minority government led by Macron loyalist Sebastien Lecornu is racing to pass the budget in France’s fractured parliament, where lawmakers have added amendments that could raise taxes on companies by billions of euros if they survive in the Senate.
“Despite political upheavals and international uncertainties, our companies are investing, exporting, and driving the country forward,” Finance Minister Roland Lescure said in reaction to the GDP report he described as “remarkable.”
“The swift adoption of a budget that preserves the confidence of businesses and households will be crucial to maintaining this momentum,” he added.
(Reporting by Leigh Thomas;Editing by Sudip Kar-Gupta and Bernadette Baum)
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