France’s economy likely posted modest growth in the final quarter of last year, supported by strength in key industrial sectors despite ongoing political and fiscal uncertainty. The Bank of France said economic output probably expanded by at least 0.2% in the fourth quarter compared with the previous three months, maintaining the same estimate issued earlier. The assessment was based on a broad business sentiment survey covering around 8,500 companies across industry, services, and construction. Activity continued to advance in December, though at a slightly slower pace than in November, suggesting momentum remained intact heading into year end. Aerospace and defence related industries were cited as the main drivers of industrial growth, helping offset softer performance in other areas of the economy.
The survey showed industrial activity remained resilient in December, while services recorded more moderate gains and construction activity was largely flat. Within construction, finishing work continued to outperform structural projects, reflecting uneven demand across subsectors. Looking ahead, the outlook points to a shift in momentum as January approaches. Industrial firms expect activity to slow, partly due to reduced aerospace production, limited visibility on order books, and lingering uncertainty. By contrast, service sector companies anticipate a pickup in activity closer to the average pace seen over the past decade, offering a potential counterbalance to industrial weakness. These mixed signals highlight the uneven nature of France’s recovery as sector specific dynamics continue to shape overall growth.
Despite political challenges, including an unresolved 2026 budget, the central bank noted a gradual decline in its monthly uncertainty indicator across industry, services, and construction. While uncertainty remains elevated, the easing suggests businesses may be adapting to the policy environment even as lawmakers struggle to finalize fiscal plans. France’s parliament failed to pass a budget before the end of last year, forcing the government to rely on temporary measures, and debate over the 2026 framework has resumed. Economists say the combination of modest growth, sectoral divergence, and fiscal uncertainty will remain key themes for France and the broader euro zone in the months ahead.
