French GDP remained stable in the fourth quarter of 2023 and increased by 0.9% over the whole year, after 2.5% in 2022, INSEE announced on Tuesday. Annual growth is thus close to the 1% forecast maintained by the government, thanks to a strong second quarter at 0.7%, revised upwards by 0.1 point. Growth was zero in the other three quarters, the National Institute of Statistics having revised upwards by 0.1 point on Tuesday that of the third quarter, previously announced at -0.1%.
“The global environment, and therefore the external demand addressed to France, was better than what we feared,” the chief economist of the Bank of France, Olivier Garnier, explained to the National Assembly in mid-January. He also highlighted an easing of inflation “a little faster than expected”, even if on an annual average prices still increased by 4.9% in 2023 after 5.2% in 2022, but with a fairly marked slowdown. at the end of the year.
Charlotte de Montpellier, economist at ING, estimated in recent days that the provisional result announced on Tuesday could be revised in the coming weeks, when the detailed results are published. She noted in fact that business surveys, particularly in businesses, go “in all directions at the moment” and do not allow us to get a precise idea of real activity. France can still reassure itself by comparing itself to Germany for which economists predict two successive years of recession in 2023 and 2024.
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The difference is significant again this year between economists’ estimates and the 1.4% growth which the government has not yet officially renounced. But due to a growth gain of 0.1% achieved for the whole of 2023, according to INSEE, such a level seems increasingly difficult to reach in 2024. In an interview with the Tribune on Sunday this week -end, the governor of the Bank of France François Villeroy de Galhau predicted it rather around 0.9%, with the return of household consumption by 2024. The appetite for major purchases rose sharply during the latest INSEE survey on household morale.
Household consumption, which accounts for more than half of gross domestic product, would thus take the place of foreign trade this year as the engine of growth. “It’s a more regular and safer engine,” welcomed the governor. With the state deficit already slipping by two billion euros at the end of 2023, Finance Minister Bruno Le Maire will have a lot to do this year to limit the public deficit to 4.4% of GDP if growth is not not completely met, or if social demands are followed by financial concessions.
The abandonment of the increase in taxes on non-road diesel (GNR) for farmers, announced Friday by Prime Minister Gabriel Attal, and which in turn is demanded by the building, should be neutral for the budget. Bruno Le Maire had in fact promised that the State “would not put a euro in its pocket” with this reform, and would devote the entire economy to the “greening” of these sectors. It is therefore the ecological transition which could pay the price.