French economy: Medef fears a recession as early as the second quarter of 2026

Patrick Martin raises the possibility of a recession for the French economy.

During a press conference held before a B7 meeting, which brings together employers' organizations from the G7 countries, Patrick Martin expressed his concerns about economic activity in France.

"Yes, we are indeed worried about a recession" in the second quarter, said Patrick Martin at a press conference held ahead of a meeting of the B7, a body bringing together employers' organizations from the G7 countries, of which the Medef is chairing this year.

The B7 met in Paris amidst high international tensions

The B7, which the Medef will chair in 2026, will meet next week in Paris. This meeting will precede the G7 summit scheduled for June 15-17 in Evian-les-Bains.

Business representatives from the major industrialized economies are expected to discuss proposals for G7 leaders, in an environment marked by economic uncertainties and international geopolitical tensions.

Exogenous factors singled out by the Medef

For Patrick Martin, the risks to French growth come primarily from factors external to the national economy.

Fears of a "recession" in the French economy in the second quarter are "essentially linked to exogenous factors", due "primarily to the Middle Eastern crisis, which we are careful not to assume will be resolved quickly", according to Patrick Martin.

This situation comes at a time when several economic indicators show a slowdown in activity.

A declining GDP and concerns about growth

At the end of May, the National Institute of Statistics and Economic Studies (Insee) indicated that French gross domestic product (GDP) had fallen by 0,1% in the first quarter compared to the last quarter of 2025, after initially announcing zero growth between January and March.

The decline in GDP, coupled with persistently high inflation and a drop in household consumption, is reviving fears of a technical recession, characterized by two consecutive quarters of contraction in economic activity.

The government's budgetary decisions are also being called into question.

Beyond the international context, Patrick Martin also mentioned several internal factors that could hinder growth.

Patrick Martin also mentioned other "endogenous factors", notably "related to options taken by the government, under constraints, I am absolutely aware of that", whether "financial" or "political".

The head of the Medef (French Business Confederation) was referring in particular to the freeze on the scale of employer social security contribution reductions announced by the government. This measure is expected to generate €2 billion in savings for the state.

On this subject, "perhaps it is unavoidable in the short term" given the budgetary constraints, said Patrick Martin, but without failing to warn of "negative effects on growth, employment, purchasing power" in the long term.

Increased vigilance is needed for French companies.

In this context of economic slowdown, French companies remain attentive to developments in the international economic situation, national budgetary decisions, and growth prospects for the coming months. Discussions at the B7 and G7 could provide some answers to the economic and geopolitical challenges currently facing the French economy.