2024-01-30 07:54:52
This is a small disappointment for the government. Even if the figure published this morning by INSEE is a first estimate which could be revised subsequently, French growth will only have been 0.9% in 2023. That is to say a little less than the 1% increase hoped for. by the executive.
According to INSEE, GDP in the fourth quarter was stable, just like in the previous quarter, the result of which was revised upwards from -0.1% to 0%. Removing, therefore, the fear of the French economy entering into recession.
Negative contribution of domestic demand
Final domestic demand (excluding stocks) contributed negatively to GDP growth this quarter, explains INSEE, mainly due to the decline in household consumption and investment. Conversely, foreign trade rebounded in the fourth quarter of 2023 and contributed positively to GDP growth.
Ultimately, most of the growth recorded in 2023 comes from the second quarter, when GDP recorded an increase of 0.7%, underlines INSEE. But it is the exception that proves the rule, activity having been stable throughout the rest of the year.
Fall in consumption and slowdown in investment
In detail, if during the last three months of the year, household consumption only fell “slightly”, over the year as a whole, its poor performance was much more noticeable: it fell by 0.7%, far from the increase of 0.6% recorded in 2022.
The cause: a decline in the consumption of goods (-1.6%) largely attributable to a further significant drop in French food consumption. This in fact fell by 4.7%, accentuating the trend already observed in 2022 (-3.6%). Added to this was a slowdown in the consumption of services (2.4% after 8.5%) largely linked to the poor performance of the accommodation and catering sector.
As for business investment, the picture drawn up by INSEE is hardly more encouraging. If it shows an increase of 1.2% over the whole year, it is half the rate compared to that observed a year earlier.
The slowdown is also noticeable in terms of production, which increases by 1.7% in 2023, far from the 3.7% of the previous year. It is the activity in services and in particular in accommodation and catering which, in 2022, benefited from the post-covid rebound.
Low growth gains for 2024
At the end of the fourth quarter, the growth carryover for 2024 stood at 0.1%. A low figure which seems to make the government forecast of growth of 1.4% for the whole year quite optimistic. Even if INSEE forecasts a rebound in activity at the start of 2024, and estimated, in its latest forecasts, that growth will be 0.2% in the first quarter as in the second.
For its part, the IMF is more in line with the French government and estimates that French growth could be 1.3% in 2024. But the Banque de France is far from sharing this optimism. In an interview with “La Tribune Dimanche”, published last weekend, the governor of the Bank of France, François Villeroy de Galhau, estimated that growth will be around 0.9%. Neither more nor less than in 2023.
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