Finance
French growth on track but middle east conflict clouds outlook, central bank says
Published by Global Banking & Finance Review®
Posted on March 10, 2026
2 min readLast updated: March 10, 2026
Quick Summary
France’s economy was on track for modest 0.2–0.3% growth in Q1, supported by strong activity in technology, services and construction, but the sudden outbreak of the Israel–U.S. conflict with Iran has injected uncertainty through potential energy price hikes and supply‑chain disruptions.
Bank of France: French Growth on Track, But Middle East Tensions Cloud Forecast
French Economic Outlook and Risks
First-Quarter Growth Projections
PARIS, March 10 (Reuters) - France's economy was heading for firm first-quarter growth before last week's outbreak of the Israel-U.S. conflict with Iran clouded the outlook, the Bank of France said on Tuesday.
The central bank kept its estimate that euro zone's second-biggest economy will grow 0.2% to 0.3% in the first quarter but said the forecast could be trimmed if the Middle East crisis drives up energy prices or disrupts supply chains.
Business Survey Insights
Survey Methodology and Timing
The monthly business survey underpinning the estimate drew on about 8,500 responses collected between February 25 and March 4. Reports on February activity were little changed, but uncertainty jumped among companies that responded after the February 28 outbreak of war, the bank said.
Sector Performance
Industry and Technology
The survey found industry activity remained above its long-term trend for a ninth month, led by technology sectors, while services exceeded firms' earlier expectations. Construction also held up despite weak underlying conditions.
Financial and Operational Challenges
Companies reported slightly worse cash-flow positions amid longer client payment delays. Supply-chain pressures increased marginally and selling prices rose at a moderate pace.
Risks and Forward-Looking Statements
Firms expected activity to remain firm in March, though the central bank flagged the renewed uncertainty as a risk to the end of the quarter, with companies citing the possibility of higher energy prices and potential logistics disruptions.
(Reporting by Leigh Thomas. Editing by Mark Potter)
Key Takeaways
- •Bank of France maintains Q1 growth forecast at 0.2–0.3%, backed by roughly 8,500 business responses collected Feb 25–Mar 4 (lemonde.fr)
- •Industry, services and construction sectors remain robust, with technology and business services leading, though companies report slightly weaker cash‑flow and rising uncertainty post‑Feb 28 conflict (banque-france.fr)
- •Middle East conflict risks raising energy prices significantly—Brent crude up 10–13%, gas & oil prices spiking—potentially trimming growth and pushing inflation higher (lemonde.fr)
References
Frequently Asked Questions about French growth on track but Middle East conflict clouds outlook, central bank says
1What is the Bank of France's first-quarter growth estimate?
The Bank of France estimates French economic growth at 0.2% to 0.3% for the first quarter.
2How could the Middle East conflict affect France's economy?
The conflict could drive up energy prices and disrupt supply chains, potentially reducing French growth forecasts.
3Which sectors are leading growth in France, according to the survey?
Industry, led by technology sectors, and services exceeded expectations, with construction also holding up.
4What risks did French firms cite in the latest survey?
Firms cited risks of higher energy prices, potential logistics disruptions, and increased uncertainty due to the Middle East conflict.
5How many companies participated in the Bank of France survey?
About 8,500 companies responded to the monthly business survey underpinning the growth estimate.
