French gross domestic product (GDP) fell by 0.1% in the first quarter compared to the last quarter of 2025, INSEE indicated on Friday May 29 in its detailed results, which had initially announced zero growth from January to March, the period when the war in the Middle East began.
Both domestic demand and foreign trade weighed on growth in the first quarter, according to the National Institute of Statistics and Economic Studies. Only inventory changes attenuated the decline in GDP. The first quarter was notably marked, from February 28, by the outbreak of war in the Middle East.
But INSEE does not publish a breakdown of growth by month, which does not allow at this stage to determine the influence of the war against Iran in the quarterly result. Household consumption fell by 0.2% in the first quarter, including consumption of goods which decreased “significantly” (-0.7%), under the effect of a decline in energy consumption, explained INSEE.
Domestic demand and trade at half mast
Consumption of services increased by 0.2%. Investment also fell significantly (-0.6%), particularly in construction (-1.7%). In total, domestic demand (excluding stocks) contributed -0.2 points to GDP growth this quarter. Exports fell sharply (–3.5%) due to the drop in aircraft exports.
Imports also decreased (-0.9%). In total, the contribution of foreign trade to the evolution of GDP is clearly negative (-0.9 points). Only the contribution of inventory variations to the evolution of GDP is clearly positive this quarter (+1 point).
At the same time, which is also not good news for future consumption, the household savings rate, already very high in France, increased further, from 17.7% to 17.9%. Finally, the margin rate of companies fell significantly in the first quarter, standing at 31.7% of their added value, after 32.5% in the previous quarter.
