French Growth Faces 0.1 Point Hit From Summer Drought

France's Finance Ministry has estimated that this summer's drought and heatwaves could shave 0.1 percentage points off the country's economic growth this year, with the agricultural sector bearing the brunt of the losses.

The ministry, however, stressed that the figure is a preliminary estimate and not an official revision of its 0.7% growth forecast for 2026. The potential drag on the economy is largely attributed to an estimated 8% decline in agricultural value creation, a situation worsened by higher fertiliser costs.

While significant, the projected impact is less severe than in 2003, another year of extreme summer weather, when farming output fell by an estimated 15%. The ministry noted that the effect on other sectors appears more limited and localised.

Separately, Arnaud Rousseau, head of the main farmers' union FNSEA, told reporters that agricultural production losses this summer would exceed €10 billion, with over €5 billion in estimated losses already recorded in both the livestock and crop sectors. He called for a "massive response" from authorities to prevent farms from ceasing operations.

The agriculture ministry has postponed the announcement of an aid package for farmers, originally due on Thursday, as discussions continue. Last week, the ministry indicated the plan would include several hundred million euros in compensation for weather-related damage.

The news follows a revision by the INSEE statistics agency, which last week cut second-quarter economic growth to 0.0% from an initial 0.2% reading, making the government's full-year forecast of 0.7% increasingly difficult to achieve. Finance Minister Roland Lescure described the INSEE downgrade as "the first impact of the horrible summer that we had."