France Returns to Growth in the Second Quarter With Inflation Among the Lowest in the Euro Area

France's economy returned to growth in the second quarter, expanding about 0.2% from the previous quarter and helping the wider euro area outperform expectations. Eurostat's preliminary estimate showed euro area GDP rising 0.4%, up from flat growth at the start of the year and ahead of forecasts, suggesting the bloc has proved more resilient than feared despite higher energy prices and geopolitical uncertainty. Within that picture, growth has been uneven: Ireland and Spain led among European economies, while France, Germany and Italy expanded at a more modest pace. On inflation, France stood out at the lower end of the spectrum, with an annual rate of about 2.4% in July, among the lowest in the euro area, even as overall bloc-wide inflation edged up to 2.9% on the back of a sharp rise in energy costs. The combination of steady, if unspectacular, growth and relatively contained inflation gives French policymakers and the European Central Bank some breathing room, though officials remain watchful of energy-driven price pressures and the risks posed by the conflict in the Middle East.