The French economy experienced no growth in the last quarter of 2023, primarily due to lackluster domestic demand. Figures released by the national statistics agency Insee on Tuesday revealed that gross domestic product remained stagnant between October and December, failing to meet economists' expectations of a 0.1% increase. Furthermore, previous estimates for the third quarter were revised downwards from a minor decline of 0.1% to zero growth.
Disappointingly, this means that the French economy remained stagnant throughout the second half of the year, with a meager growth of just 0.9% for the entire year. This growth rate aligns with the forecasts outlined by the Bank of France in September and marks a significant slowdown compared to the previous year.
In the face of lackluster domestic demand, both industrial and household sectors experienced subdued growth towards the end of the year. However, there was a silver lining in the form of net trade, which made a positive contribution as weak demand affected imports while exports remained relatively stable during the quarter.
Looking ahead, the Bank of France anticipates little improvement in the coming year, with estimated GDP growth rates remaining unchanged for 2024. However, a slight uptick is expected in the following year.
- The Wall Street Journal