French growth slowed in the third quarter

Economic activity bends but does not break: French growth decelerated markedly in the third quarter, with GDP only progressing by 0.2% after a jump of 0.5% in the spring, according to data released on Friday October 28 by the ‘Insee.

In line with the forecasts of the National Institute of Statistics and slightly lower than those of the Banque de France (+0.25%), growth benefited from a slight increase in the production of services (+0.5%) , down however compared to that of spring (+ 1%).

The last three months of the year should be more difficult, with zero growth expected in the 4th quarter by INSEE, which forecasts a rate of 2.6% for the whole of 2022 (0.1 point below the government estimate).

Household consumption is stagnating

Unpleasant surprise in the summer figures, the growth of household consumption expenditure on accommodation and food services has shrunk, falling from 12.7% in the 2nd quarter to only 0.6% over the July period. to September.

However, these two sectors traditionally benefit from the influx of tourists in the heart of summer and had benefited from exceptional household spending in the spring after two years of the pandemic.

Goods and services combined, household consumption, the usual driver of the French economy, therefore stagnated in the third quarter (0.0% after +0.3%).

Investment remains on the corporate side

In detail, energy consumption remains well oriented (+0.6%) unlike food consumption, down 1.6% over the quarter, with food prices continuing to rise in recent months and forcing consumers to tighten their belts.

The indicator that summarizes the loss of individual purchasing power (“gross disposable income per consumption unit”) thus fell by 1.8% in the first quarter and by 1.2% in the second. What encourages households to save. INSEE thus predicts an increase in the savings rate by the end of the year (17% against 15.5% in the first half).

On the corporate side, however, investment remains encouraging and is even progressing compared to the spring.

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