French Economy Grows 0.1% Amid Trade Tensions

France's economy narrowly avoided recession in the first quarter, growing by 0.1% after a contraction in the previous quarter, but the expansion was weaker than economists predicted and driven largely by companies increasing inventories rather than underlying consumer or investment growth. Household consumption stalled, and investment continued to contract, underscoring persistent weakness in domestic demand. Foreign trade was a significant drag as exports fell and imports rose, with new U.S. tariffs and global trade tensions—especially under President Trump’s administration—adding uncertainty and pressure. French industry leaders have warned that further tariffs could result in layoffs, with sectors like aeronautics and luxury goods already feeling the impact of weaker demand from the U.S. and China. Political instability, marked by a fragile minority government and risks of no-confidence votes, further weighs on economic prospects. Overall, France enters a tougher economic environment with little momentum, as both domestic and external challenges persist.