The slight progression of the gross domestic product is based in particular on the lifting of restrictions linked to the COVID-19 and on the support measures for purchasing power.
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Despite concerns about the degradation of the global economic situation, confirmed on Thursday, July 28, by bad American indicators, the French economy shows a certain resistance. In the second quarter, the gross domestic product (GDP) posted a slight increase of 0.5 %, following the 0.2 % drop recorded over the first three months of the year. A result superior to the expectations of conjunctors, who did not expect more than 0.2 % increase. “This is good news,” says Nicolas Carnot, director of Economic Studies and Syntheses of INSEE, highlighting the “resistance” of the French economy and its tourist assets.
“We have limited the damage” on household consumption – which represents a large half of the country’s economic activity -, “especially due to public support”. After a bad first quarter, marked by the omicron variant, inflation and the shock of war in Ukraine, which had led households to significantly reduce their purchases (-1.3 %), it is low decrease 0.2 % in the second quarter, the consumption of services compensating for the slightest purchases of goods. In mid -2022, the growth acquired in France – in other words, the growth rate that would be reached over the whole year if the growth was zero in the second half – reached 2.5 %, while The annual forecast established by INSEE amounted to 2.3 %.
That said, “you have to remain cautious for the future”, tempers Mr. Carnot, “because the horizon darkens”. The monetary tightening, intended to curb inflation, risks weighing on the general climate in the coming months, and the indicators of July show that household confidence is now “altered”, according to Mr. Carnot. The French are particularly concerned about their financial situation and are lowering their real estate investment and major purchases. And for good reason: according to the first estimates, published Friday, July 29, consumer prices increased by 6.1 % over the last twelve months in France, after 5.8 % in June.
” Dynamics that are balanced “
This new increase is mainly linked to food and services: food prices alone are soaring 6.7 % over the period, while the services, which remained more stable in the first months of The year now has an increase of 3.9 %. “We manage to avoid recession thanks to the release of restrictive measures linked to COVVI-19, confirms Stéphane Colliac, economist specializing in France at BNP Paribas. The impact of inflation alone would have justified a second quarter of decrease GDP, which would have technically placed France in recession, but there are several dynamics that balance. “On the negative side, energy consumption and that of food products – which represent no less than a third of consumption consumption total of goods – remain downward oriented.
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