Inflation reaccelerates to 5.9% year on year in April, growth reaches 0.2% in the first quarter

2023-04-28 10:34:17

GDP is up slightly. Growth in French economic activity reached 0.2% in the first quarter of 2023, supported by the dynamism of industrial production and foreign trade, the National Institute of Statistics (Insee) said on Friday.

This first estimate of gross domestic product (GDP) is slightly higher than INSEE’s forecast, which forecast an increase of 0.1% over the first three months of the year. After a 2.6% increase in GDP over the whole of 2022, economic activity continued to resist and grow slightly at the start of 2023.

“Companies continue to invest”

The Minister of the Economy, Bruno Le Maire, hailed this Friday “the solidity” of the French economy, whose “fundamentals are holding up”. “Companies continue to invest and create jobs, which brings us closer to our goal of full employment,” he added. Household consumption of goods fell by 0.2% in the first quarter, particularly in food, hit by double-digit inflation.

Because at the same time, prices in stores have continued to increase. Inflation rebounded to 5.9% year on year in April in France, after slowing to 5.7% in March, according to an initial estimate from INSEE, which attributes this jump to energy and fuel prices. services. The increase in food prices, on the other hand, was slower than in March, since their prices rose by 14.9% over one year after having reached 16% the previous month, details the institute.

The drop in consumption “is explained both by the reduction in the consumption of agri-food products and by the decline in purchases of agricultural products”, further specifies INSEE. “Tobacco consumption is down sharply,” add the statisticians. Purchases of manufactured goods also fell by 1.2% in volume between February and March, indicates INSEE, while energy expenditure increased slightly (+0.3% over one month).

At the same time, the production of goods and services accelerated by 0.4%. The manufacturing industry, above all, showed dynamism (+0.7%). Like energy production which benefited from the reopening of nuclear power plants, output rebounded at refineries, with strikes in March against the pension reform having been “smaller” than those in October last year, detailed Insee.

Due to an increase in exports and a decline in imports, foreign trade contributed positively, by 0.6 percentage point, to GDP growth between January and March. INSEE has also revised down the growth figures for the third (0.1%) and fourth (0%) quarters of 2022 in France by 0.1 point. And this, without affecting the 2.6% increase in GDP recorded for the year as a whole.