In politics, there is no such thing as a small victory, even if it means making a big difference. INSEE unveiled its first growth estimate for the first quarter of 2024 on Tuesday April 30: GDP increased by 0.2%. Good news, given that in March, the statistics institute predicted a zero score in its latest economic report. “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”, quickly welcomed Bruno Le Maire .
This first estimate, however, remains in line with the forecasts of the Banque de France. Above all, it does not change anything in the growth trajectory previously anticipated by INSEE which would still cap at +0.5% in the first half of the year. To achieve the 1% objective set by the government for 2024, we will have to work hard. This would assume that GDP grows by at least 0.7% in the third and fourth quarters. Suffice to say that the task promises to be arduous.
To achieve this, the Minister of the Economy hopes for “a recovery in consumption and business investment in the latter part of the year” thanks, in particular, to the loosening of monetary policy planned for June on the side of the European Central Bank.
But again, we will have to wait. The rate increases decided since 2022 have always taken several months to really have their effects on the economy. The same goes for the decline. In addition, most economists, like the IMF, agree that activity should only grow by 0.7% this year. Especially since the government has embarked on a race to reduce public spending which could ultimately hamper French growth. And if the executive’s forecast turns out to be false, a new round of savings should be sought. So nothing to brag about.