French economic activity is already in better shape. In the first quarter, the country’s growth was flat at 0%, according to a first estimate published Friday by INSEE. A forecast well below expectations, the National Institute of Statistics having forecast growth of 0.3%, while the Banque de France was counting on a small increase in gross domestic product (GDP) of 0.25%. Economic activity is thus clearly marking time after the 0.8% growth recorded in the fourth quarter of 2021 (figure revised upwards by 0.1 point) and the strong recovery for the whole of last year (7 %).
This figure is explained by the fact of a decline in household consumption, traditionally the engine of French growth, against a backdrop of inflation and war in Ukraine, according to the institute which also publishes the figures. Household consumption thus “significantly” fell in March, by 1.3%. “This decline is mainly due to the decline in food consumption (-2.5%) and, to a lesser extent, that of energy consumption (-1.6%)”, but also in accommodation- catering and textile clothing, said the National Institute of Statistics.
The hotel and catering industry still hit, investment resists
The health crisis, still very present in January, further affected the production of goods and services in the first quarter (which increased by 0.5%), with a sharp drop in activity in the hotel and catering industry, education services , “linked to the closure of certain classes”, and conversely an improvement in health services. Goods production accelerated after two quarters of stability.
For the moment, investment is holding up well, even if it is slowing down, with an increase of 0.2% in the first quarter, driven by investments in IT services in connection with the growing digitization of companies.
Finally, foreign trade continues to recover, even if it is at “a slower pace than the previous quarter”, underlines INSEE, with a 1.5% increase in exports, when imports increased by 1 .1%.