Finance
French Central Bank Sees First Quarter Growth of 0.3%
Published by Global Banking & Finance Review®
Posted on April 13, 2026
2 min readLast updated: April 13, 2026
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France’s economy likely expanded 0.3% in Q1 2026, slightly above Q4’s 0.2%, as businesses front-loaded orders amid rising Middle East conflict risks—but sentiment is weakening and supply‑chain pressures are mounting.
Bank of France Expects 0.3% Economic Growth in First Quarter of 2024
Central Bank’s Outlook and Economic Performance
First Quarter Growth Driven by Anticipated Price Rises
PARIS, April 13 (Reuters) - France's economy grew marginally faster in the first quarter as some businesses rushed to place orders ahead of expected price rises following the outbreak of war in the Middle East, the central bank said in its monthly outlook.
Growth Forecasts and Economic Projections
The euro zone's second-biggest economy likely grew 0.3%, up from the final quarter of last year when it had expanded 0.2%, the Bank of France said, offering a forecast in line with previous estimates.
The outlook supports the central bank's view that the economy will grow 0.9% this year "despite all the uncertainties linked to the conflict in the Middle East," Governor Francois Villeroy de Galhau said.
Business Climate Survey Insights
Drawing on its monthly business climate survey of 8,500 firms, the central bank said activity held up in March across industry, services and construction with factory output outperforming business expectations from the previous month.
Sector Performance
Manufacturing and Industry
Manufacturing was bolstered by strong momentum in aeronautics, nuclear power and defence, while services and building activity also remained broadly supportive.
Services and Construction
However, the central bank warned that the conflict in the Middle East was weighing on sentiment. Businesses were more cautious when assessing April, with uncertainty indicators rising sharply to levels last seen during the early months of Russia's invasion of Ukraine.
Supply Chain and Price Pressures
Renewed Supply-Chain Strains
Villeroy also flagged renewed supply-chain strains, particularly for companies reliant on petroleum-based products such as plastics and solvents, as transport disruptions and higher energy costs rippled through parts of industry.
Rising Prices and Business Responses
"More firms are signalling that they will increase prices in April," he said. While around 11% of industrial companies raised prices in March, in line with historical norms, that share was expected to rise to 23% this month, the survey found.
(Reporting by Leigh ThomasEditing by Peter Graff)
Key Takeaways
- •The Bank of France estimates Q1 2026 GDP growth at around 0.2–0.3%, up from 0.2% in Q4 2025 based on monthly surveys of 8,500 firms(banque-france.fr).
- •Businesses rushed to place orders ahead of anticipated price hikes following the outbreak of war in the Middle East, supporting activity in manufacturing (notably aeronautics, nuclear power, defence), services and construction(banque-france.fr).
- •However, sentiment weakened in April: uncertainty surged to levels last seen early in Russia’s invasion of Ukraine, with renewed supply‑chain strains—especially in petroleum‑based inputs—and rising expectations of price increases (industrial price‑raisers likely to rise from ~11% in March to ~23% in April)(banque-france.fr).
References
Frequently Asked Questions about French central bank sees first quarter growth of 0.3%
1Why did France's economy grow faster in the first quarter?
Businesses placed orders ahead of expected price increases due to the Middle East conflict, boosting economic growth.
2How has the Middle East conflict affected the French economy?
The conflict has increased uncertainty and supply-chain strains, especially for industries relying on petroleum-based products.
3Which sectors contributed to France's economic performance?
Manufacturing, especially aeronautics, nuclear power, and defense, as well as services and construction, supported growth in March.
4Are more French companies expected to raise prices in April?
Yes, the survey found 23% of industrial companies plan to raise prices in April, up from 11% in March.
