Support for the economy will come mainly from industrial production, which couldprogress slightlyin the first quarter, according to INSEE. Pcess609 / stock.adobe.com
INSEE has not provided a forecast for the whole of 2023, while the government is counting on growth of 1%.
The French economy should grow by 0.2% in each of the first two quarters of 2023 thanks to resilient industrial production, while inflation should decline in June to 5% over one year, INSEE predicted on Tuesday.
«We are in a rather hesitant economic situation, neither frankly favorable nor frankly unfavorable“Summarized Julien Pouget, head of the business cycle department of the National Institute of Statistics during a press conference. After progressing by a timid 0.1% in Q4 2022, Gross Domestic Product (GDP) should thus increase by 0.2% in Q1 then by 0.2% again in Q2, against 0.1% respectively. and 0.3% previously anticipated.
“Modest” rebound
After a sharp decline at the end of 2022, household consumption should reboundmodestly», driven by energy consumption in normal winter conditions, after a particularly mild autumn. While purchases of vehicles would continue to progress, those of food products could remain penalized by double-digit price increases, up to 13.7% over one year in this sector in February, according to INSEE.
Overall, consumer price inflation should remain on “a trayaround 6% over one year in February, a level not seen in nearly four decades, before gradually declining to 5% in June. But since food now weighs more than energy in this indicator, core inflation (excluding energy and fresh food products) should remain above this level, at 5.7% in mid-2023. Support for the economy will come mainly from industrial production, which couldprogress slightlyin the first quarter, according to INSEE.
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It will benefit from the rebound in coking-refining which had suffered from the October strikes, fewer supply difficulties and increased electricity production with the return to service of nuclear reactors. In services, the activity should always show “a moderate pace».
However, these forecasts do not take into account the possible impact of strikes against the pension reform project, which could have a greater impact on certain sectors such as transport.
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