This is the first estimate published for this period by the National Statistics Institute, which had previously announced a lower forecast of zero growth between January and March. France’s gross domestic product (GDP) grew by 0.2% in the first quarter of 2024, supported by household consumption and business investment, INSEE said on Tuesday, April 30.
More optimistic, the Banque de France was counting on an increase of 0.2%. In the last quarter of 2023, the French economy recorded growth of 0.1%.
An acceleration in household consumption
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 certainly increased by 2.3% over one year, but significantly less than in February (3%), thanks to a slowdown in food and energy prices. and manufactured products.
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.
The target of 1% annual increase in GDP
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 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.
The minister underlines the “solidity” of the country’s economy
The Minister of Economy and Finance, Bruno Le Maire, welcomed on Tuesday the 0.2% growth recorded by gross domestic product in the first quarter, seeing it as a sign of the “solidity” of the economy. from the country.
“To all those who want to believe that our economy is at a standstill: the facts are stubborn. French growth is progressing. It is a new sign which reflects the solidity of our economy”, reacted Mr. Le Maire after the publication by INSEE of a first estimate of GDP for the first three months of the year. “The government’s strategy is paying off,” he added.