Bank of France lifts Q2 growth outlook to 0.2% despite heatwave

The Bank of France raised its forecast for France’s second‑quarter 2026 gross domestic product growth from 0.0% to 0.2%, citing stronger activity in June. A survey of 8,500 firms showed a clear rebound in industry, especially in defence, technology, automotive and agro‑food, as well as renewed demand in services and construction.

The record heatwave at the end of June caused only modest disruptions. Construction schedules were adjusted, but many firms avoided major losses; hotels and cooling‑system orders even rose. The uncertainty indicator fell back to pre‑Iran‑war levels, and companies pointed to international tensions and input‑cost concerns.

The central bank expects growth to continue in July at a more moderate pace and projects an annual increase of about 0.5%, narrowing the gap with the government’s 0.7% target for 2026.