Most moderate growth in gross domestic product in 10 years
October 7par Manuel Marchal
This October 4, 2024, INSEE presented to the press the 2023 assessment of the Reunion economy based on the publication of “CEROM” (Quick Economic Accounts for Overseas — Editor’s note) by INSEE, AFD and IEDOM.
In Reunion, the gross domestic product (GDP) was 23.2 billion euros in 2023, it increases by 1.7% in real terms (5.4% in value). Although the economy continues to grow, the pace is slower than in 2022 (+2.6%) and before the health crisis (+2.5% on annual average between 2014 and 2019). This is the most moderate progression in ten years, with the exception of 2018 (yellow vest movement) and 2020 (Covid-19 pandemic). In 2023, GDP per capita in Reunion Island reaches 26,300 euros, an increase of 4.8% in value, after an increase of 5.8% in 2022.
Household consumption continues to grow modestly, at a similar pace to the previous year, despite a drop in imports. It amounts to more than 13 billion euros. According to the publication, this is the result of sustained local production and inventory reduction by companies. Public administration consumption amounted to 10 billion euros. Investment is also on the rise again after a decline in 2022, it is estimated at 4.9 billion euros.
Consumption driving growth
According to the publication of “CEROM”, the growth of the Reunion economy has not returned to the level before the COVID-19 pandemic. 2022 marked a recovery with +2.6%. But 2023 marked a halt with +1.7%.
This data is worrying, because even with growth rates of 5% in Reunion in the years 1990-2000, unemployment did not decline.
This shows a particularity of the economy of Reunion Island. It is capable of producing more than 23 billion euros in wealth in 2023. But half of the population is excluded from sustainable work. Mass unemployment has been a reality for 50 years, and nearly 40% of the population lives below the poverty line.
It is consumption that is the main engine of growth. The money that finances this growth comes in particular from public transfers in the form of salaries, subsidies and social benefits.
The main consequence of this relative economic stagnation is an insufficient number of job creations in 2023.
(to be continued)
M.M.
