INSEE notes that domestic demand “is regaining some momentum under the effect of the rebound in household consumption”. Investment, however, is declining, especially that of businesses.
French GDP increased by 0.4% in the third quarter, INSEE announced on Wednesday October 30 in a first estimate consistent with its forecasts, “stimulated by the Olympic and Paralympic Games”according to the institute. INSEE observes that domestic demand “regains some momentum under the effect of the rebound in household consumption”. This increased by 0.5% this summer after remaining stable in the second quarter, “about half due to the consumption of recreational services as part of the Games”.Household consumption represents more than half of GDP.
On the other hand, investment is declining (-0.8% after -0.1% in the second quarter), and particularly that of businesses (-1.4% after -0.2%) while business leaders have spent the summer fearing the consequences of the dissolution of the National Assembly on the economy. In total, domestic demand (excluding stocks) contributes positively to GDP growth in the third quarter: +0.2 points after +0.1 points in the second.
Consequences of dissolution
The contribution of foreign trade remains slightly positive in the third quarter (+0.1 point after +0.2 point) because imports fell more sharply (-0.7% after +0.1%) than exports (-0 .5% after +0.5%). Finally, inventory variations contribute +0.1 point to growth, after a zero contribution in the second quarter.
In total, “growth assets”that is to say what annual growth would be if GDP remained stable in the fourth quarter, is already 1.1% at the end of the third quarter, the government's forecast for the entire year. However, the national statistics institute does not expect any further developments, since it forecasts zero growth in the fourth quarter. The institute has slightly revised downwards growth for the first quarter (+0.2% instead of +0.3%) but this is essentially a rounding effect, the revision before rounding being l order of -0.01 points only.