The French economy has been at a standstill for six months

A thick fog. France has avoided recession, but it is not doing much better: during the last half of the year, economic activity did not progress one iota, according to provisional accounts from INSEE. For the year 2023, growth then reaches, in accordance with INSEE forecasts, 0.9%, a level close to the government's budgetary expectations at 1% (after 2.5% in 2022 and 6.4% in 2021). ). “This annual growth comes mainly from the sharp increase in the second quarter of 2023, activity having been stable over the rest of the year,” warns the statistics institute.

The gross domestic product (GDP), or the wealth of France, had in fact jumped in the spring, by 0.7%. For the other three quarters, it shows desperately zero progress. In a context of acute inflationary crisis, the French annual performance of 0.9% thus appears fragile, because it depends on a few months. Comparatively, it is of good quality, higher in any case than the average growth of the euro zone, expected around 0.6%. “To be honest, someone would have told us a year ago, at the height of the energy crisis, that we were getting out of it with no recession and ultimately annual growth of 0.9%, we would have been pleasantly surprised” , commented the boss of INSEE, Jean-Luc Tavernier, on France Inter.

In detail, in the fourth quarter, domestic demand looks gloomy. Household consumption and business investment fell by -0.1% and -0.6% respectively. The French are notably limiting their food purchases (-1.1% in the fourth quarter or -4.7% over the year). The real estate crisis can be seen in the decline in investment in construction (-1% after -0.4% in the previous quarter, or -1.4% over the year) and in that of production in construction (-0.7% in the 4th quarter bringing the decline to -1% over the year). It is in fact foreign trade that contributes the most to growth at the end of the year, with a sharp decline in imports (-3.1%), particularly of refined oil (-9.8%). Exports, for their part, remain stable

This slowdown in activity at the end of 2023 will weigh on 2024. The growth gain for this year, that is to say the level of growth if activity no longer progresses, is limited to 0.1%. Under these conditions, Bercy's forecast of GDP growth of 1.4% already appears obsolete. To simply repeat the performance of 2023, economic activity will have to accelerate quickly. In its latest economic report, INSEE estimated that “activity could then accelerate somewhat in the first half of 2024 (0.2% forecast per quarter), thanks to disinflation and a moderate recovery in world trade. ".