Business is picking up in France, driven by exports, while household consumption remains sluggish. In the second quarter, gross domestic product (GDP) increased by 0.5%, according to an estimate from the National Institute of Statistics and Economic Studies (Insee) published this Friday morning. This first estimate is significantly higher than its forecast of 0.1% growth in the economy between April and June, after an increase of 0.1% in the first quarter, revised down by 0.1 point.
“It is a remarkable performance of the French economy which shows the success of the economic policy which is based on companies, employees and work”, welcomes this Friday morning on RTL the Minister of the Economy, Bruno Le Maire. . “Have confidence in the French economy”, he notes, before adding the maintenance of “the 1% growth target for 2023”. “We can be the first carbon-free economy in Europe by 2050,” insists the minister.
Like other European economies, the tricolor engine has stalled in recent months, as the effects of inflation and rising interest rates were felt across different parts of the economy. The slowdown in GDP is also explained by a fall in household consumption under the effect of the general rise in prices. Inflation is still at a relatively high level, reaching 4.5% over one year in June. In particular, soaring food prices, which hit the French directly in the wallet, reached 14% over one year last month.
As a reminder, national statisticians had estimated the country’s growth at 0.2% in the first quarter. More generally, they anticipated growth of 0.1% in the second and third quarters, for a result of 0.6% for the whole of 2023. A balance sheet in sharp decline compared to the 2.5% growth recorded in 2022. For its part, the Banque de France is slightly more optimistic, expecting 0.7% growth in 2023, then 1% in 2024.
This forecast could change on the occasion of the public finance programming law which will be presented in September. For the time being, the Minister of the Economy Bruno Le Maire “maintains the growth forecast” while remaining “lucid about the economic environment”, according to a statement in June.