The French economy is going through a period of stagnation marked by a sharp downward revision of its growth trajectory. National output came to a complete standstill in the second quarter with GDP growth at 0.0%, while the first quarter was revised downward to -0.2%. The growth carry-over for 2026 now stands at just 0.3%, far from the initial forecasts of 0.7%. If the country has narrowly avoided a technical recession, it is solely thanks to the momentum in aeronautical exports, which rose by 2.9%, masking the persistent contraction in investment and the negative impact of corporate destocking.
This stagnation is coupled with major pressure on household budgets. Purchasing power per consumer unit fell by 0.6%, forcing households to dip into their savings to maintain their standard of living, which caused the savings rate to drop from 17.9% to 17.2%. At the same time, inflation has ticked back up to 2.4% year-on-year, heavily impacted by a 16.7% surge in energy costs linked to disruptions in the Strait of Hormuz. The combination of an impoverished population and high prices paints a picture of creeping stagflation.
Internationally, France finds itself trailing the pack. While the Eurozone recorded growth of 0.4% in the second quarter, driven by Spain (+0.7%) and Portugal (+0.8%), the French economy shares last place with Belgium. Even Germany and Italy are performing better, posting a modest 0.2% increase, while across the Atlantic, US growth reached 1.5% on an annualized basis. These divergences highlight France's difficulty in keeping pace with its economic partners.
While the French budgetary trajectory weakens, the digital asset market is showing the opposite dynamic. The price of Bitcoin is hovering around $78,000, recording a 25% increase over one month, supported by inflows into spot ETFs and institutional interest. In a national context marked by public debt exceeding 117% of GDP, long-term borrowing rates of 4.7%, and negative real returns on traditional savings, decentralized assets with capped supply are attracting attention. These shifts come as the 2027 budget will have to incorporate this new macroeconomic data and upcoming debates on cryptocurrency taxation.