The French statistics agency INSEE announced on the 29th (local time) that the gross domestic product (GDP) for the first quarter of this year decreased by 0.1% compared to the previous quarter. This fell short of the initially expected 0% growth, marking a period of negative growth.

The decline in the growth rate is the result of a complex interplay of sluggish domestic demand and foreign trade. Looking at detailed indicators, household consumption fell by 0.2%, while goods consumption decreased by 0.7% due to the impact of reduced energy usage. Investment also shrank by 0.6%, with construction investment dropping by a significant 1.7%. Exports fell by 3.5% due to poor aircraft sales.

The statistics agency explained that it is difficult to ascertain the specific economic impact of the Iran war, which began on February 28, as monthly detailed figures were not released. However, it estimated that some repercussions were reflected.

Meanwhile, according to preliminary estimates by the statistics agency, the consumer price index in May rose by 2.4% year-on-year, widening the rate of increase compared to April (2.2%). Energy prices, which surged by 14.3% in April, climbed by 16.8% in May. The statistics agency stated that the sharp rise in gas prices this month affected the overall price increase.