France’s economy stalled quarter-on-quarter in Q1 2026, compared with market expectations and the previous period’s 0.2% growth, preliminary estimates showed. This marks the weakest performance in five quarters, pointing to rising stagflation risks amid the ongoing Iran conflict. Household consumption declined (-0.1% vs 0.4%), alongside a contraction in gross fixed capital formation (-0.4% vs 0.3%). Meanwhile, growth in government spending was unchanged (0.4%). Net trade also weighed heavily, as exports fell sharply (-3.8% vs 0.8%), a steeper decline than imports (-1.7% vs -0.8%). In contrast, inventory accumulation provided a strong offset, contributing 0.8 percentage points. On the production side, output growth slowed to 0.1% (vs 0.2%), with services slowing (0.2% vs 0.3%), while construction contracted sharply (-1.3% vs 0.3%). Manufacturing rebounded (0.7% vs -0.3%). On an annual basis, GDP expanded 1.1%, following a 1.3% increase in Q4.