Bruno Le Maire affirmed this Tuesday, April 30 that this progression “reflects the solidity” of the French economy.
France’s gross domestic product (GDP) increased by 0.2% in the first quarter of 2024, supported by household consumption and business investment, INSEE indicated on Tuesday April 30. “To all those who want to believe that our economy is at a standstill: the facts are stubborn. French growth is progressing. This is a new sign that reflects the solidity of our economy. The government’s strategy is paying off. reacted in the wake of the INSEE publication Bruno Le Maire, Minister of the Economy, Finance and Industrial and Digital Sovereignty.
This is the first estimate published for this period by the National Institute of Statistics, which had previously announced a lower forecast of zero growth between January and March, after growth of 0.1% of GDP in the last quarter of 2023. More optimistic, the Banque de France was counting on an increase of 0.2%.
If we look in detail, at the start of 2024, the country’s economic activity benefited from an acceleration in household consumption, which increased by 0.4% after 0.2% in the previous quarter, against a backdrop of continued decline in Inflation. In March, the consumer price index increased by 2.3% over one year, but significantly less than in February (3%), thanks to a slowdown in food prices, energy and manufactured products.
Delicate context for the executive
GDP was also supported in the first quarter by a rebound in investments (+0.3% after -0.9%), a figure which however masks contrasting realities: if business investments continued to progress (+0, 5% after +0.8%), those of households remain in negative territory (-1.5% after -2.1%). The contribution of foreign trade is zero.
Every tenth of a percentage point will count towards reaching the target of 1% annual increase in GDP set by the government, a forecast higher than that of the main economic institutes. The context is indeed delicate for the executive, with a slippage in the public deficit in 2023, to 5.5% of GDP compared to 4.9% expected, mainly due to poor revenue. The government, however, maintained its ambition to bring it below the threshold of 3% of GDP in 2027, in line with European standards, banking on growth and control of spending to restore public finances.
Inflation slowed further in April, to +2.2% over one year, according to provisional results released on Tuesday. The increase over one year was 2.3% in March, while it was 5.9% in April 2023: the slight drop is explained this time by the slowdown in food and tobacco prices, and the slight decline in those of manufactured products, while energy prices seem to have accelerated, specifies the National Institute of Statistics.
Rebound also in Europe
Economic growth in the euro zone rebounded more than expected in the first quarter with GDP up 0.3% compared to the previous quarter, according to figures published this Tuesday by Eurostat. Bloomberg and Factset analysts on average expected growth of 0.1% over the first three months of the year. Gross domestic product (GDP) had fallen by 0.1% in the previous two quarters, according to Eurostat.
Inflation in the euro zone remained stable in April, at 2.4% year-on-year, in line with expectations, and still close to the European Central Bank’s (ECB) target of 2%, according to figures. published Tuesday by Eurostat. The good news came from core inflation – that is to say corrected for volatile energy and food prices –, an indicator particularly scrutinized by the markets which continued its decline to 2, 7%, after 2.9% in March.
Update at 11:15 a.m. with European figures.
