Shrinking output and accelerating inflation have added to Paris\u2019 mounting financial troubles, official figures show<\/p>\n
France is \u201cheaded straight for a wall\u201d unless it reins in its budget deficit, Finance Minister Roland Lescure has warned, as the country\u2019s economy contracts and inflation accelerates.
\nGross domestic product fell by 0.1% in the third quarter, following stagnation in the previous three months and a 0.2% decline at the start of the year, the national statistics agency reported on Friday. Annual inflation climbed to 3.4% in October from 3.1% in September, its highest level since January 2024.
\nLescure also described the economy as being \u201cat a standstill,\u201d underscoring the mounting financial challenges facing President Emmanuel Macron\u2019s government.
\nThe downturn extended across key sectors. Exports dropped 1.7%, largely due to weaker overseas aerospace sales, while investment fell 0.6%. Manufacturing output declined 1.4%, with automobile production shrinking for the fourth consecutive quarter.<\/p>\n
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The new sick man of Europe: Could France trigger a new sovereign debt crisis?<\/p>\n
France is also struggling with public debt equivalent to roughly 119% of GDP and a substantial budget deficit. Government borrowing costs climbed following Friday\u2019s figures, with yields on ten-year bonds approaching 5%, raising concerns about the cost of servicing the country\u2019s debt.
\nThe deteriorating outlook has increased pressure on Macron, whose government is pursuing spending cuts while boosting military expenditure and weapons deliveries to Kiev. France increased its 2026 military budget by \u20ac6.7 billion ($7.5 billion) despite its mounting debt.
\nThe government\u2019s austerity policies have also fueled nationwide unrest that began in September with protests over staff shortages and deteriorating conditions at a high school near Paris. The demonstrations quickly spread, with thousands of students demanding more education funding and accusing the authorities of prioritizing weapons over schools.<\/p>\n
Read more<\/p>\n
Hundreds arrested in Paris as rioters defy Macron (VIDEOS)<\/p>\n
The unrest escalated into violence, with rioters looting shops, setting vehicles ablaze and damaging the historic city hall in Limoges. Thousands were arrested and hundreds injured.
\nThe protests have drawn comparisons with the 2018 Yellow Vest movement, which challenged Macron\u2019s economic policies. Activists, students and trade unions have called for fresh demonstrations on Saturday, prompting authorities to mobilize 70,000 security personnel nationwide. Interior Minister Laurent Nunez warned of a \u201cvery high risk\u201d of disorder.
\nMacron has blamed the purchasing-power crisis on the US-Israeli war against Iran, the blockade of the Strait of Hormuz, and surging fuel prices. He has also accused social media platforms of \u201cdamaging democracy\u201d by circulating footage of protests and riots.<\/p>\n
READ MORE: France planning new riot crackdown law<\/p>\n
With the 2027 presidential election approaching, the economic downturn and continuing unrest have further weakened Macron\u2019s position, complicating efforts to secure parliamentary approval for a deficit-cutting budget.<\/p>\n","protected":false},"excerpt":{"rendered":"
Shrinking output and accelerating inflation have added to Paris\u2019 mounting financial troubles, official figures show France is \u201cheaded straight for a wall\u201d unless it reins in its budget deficit, Finance…<\/p>\n","protected":false},"author":1,"featured_media":40864,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[4,6,3],"tags":[],"class_list":["post-40863","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-environment","category-politics"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t