French Economy Stagnates as Growth Falters in Q2 2025

France's economy has hit a roadblock as its GDP stagnated in Q2 2025, falling short of economists' expectations. The country's GDP recorded no growth quarter-on-quarter, coming in at 0%, compared to the predicted 0.2%. This follows a 0.1% expansion in the first quarter, indicating a loss of momentum in the eurozone's second-largest economy.

The stagnation is attributed to a broad-based slowdown across key sectors, with household consumption remaining subdued due to high inflation and elevated interest rates. Business investment also softened, partly due to political uncertainty following the snap legislative elections in June and July. Exports, which had provided some support earlier in the year, lost steam amid weaker global demand.

The disappointing data put pressure on the euro, causing it to slip against the dollar in early trading. The yield on the 10-year OAT rose slightly as investors digested the implications for fiscal policy and potential credit rating actions. France's performance lags behind Spain, which grew 0.5% in the same quarter.