France: Growth held up well in Q1

04/21/2026

The impact of the energy price shock has been limited so far

Expected price indices rebounded only slightly in March, across all sectors (a very different situation to 2022). For the time being, this shock does not involve any major supply constraints. Output is likely to be more severely affected by falling demand as the issue of purchasing power resurfaces. Although this is a concern for households, they have not yet scaled back their spending intentions.

Lending trends are beginning to reflect these tensions, as lending to households is slowing, whilst lending to businesses remains relatively stable

The year-on-year slowdown in new mortgage lending loans to households for house purchase accelerated in February as interest rates began to rise. New consumer loans have fallen for the eighth consecutive month, whilst interest rates remain at historically high levels. On a year-to-date basis, net flows of bank lending to businesses – driven in particular by the repayment of state-guaranteed loans – and net debt-security issues have risen only slightly since December 2025. Bank lending rates remained stable in February.

See the Nowcast methodology.

Contact: Tarik Rharrab

Source: Refinitiv, BNP Paribas

Growth is expected to have reached 0.3% q/q in the first quarter of 2026, according to our nowcast

This acceleration compared with Q4 2025 (0.2% q/q) indicates that demand (private, public, and export) remains strong. Furthermore, this growth is thought to have been supported by households stockpiling goods in anticipation of rising inflation.

In Q2, there is a significant likelihood of adverse consequences

Our forecasts are expected to be updated soon in order to reflect the expected impact of the energy shock. Although inflation remains relatively contained outside the energy sector, this fear persists among households. Therefore, they are likely to scale back their spending intentions, which could push GDP closer to stagnation in Q2 (contrary to the forecast of 0.3% q/q prior to the outbreak of the war in Iran).

Article completed on 13 April 2026.

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