With growth of 0.5% in the second quarter, the French economy is showing resilience

The French economy is showing some resilience despite concerns about the deterioration in the global economy, confirmed on Thursday 28th July by poor US indicators. Gross domestic product (GDP) rose slightly by 0.5% in the second quarter after falling by 0.2% in the first three months of the year. A result that is better than the expectations of economic analysts, who had expected an increase of little more than 0.2%. “That’s good news”emphasizes Nicolas Carnot, Director of Economic Studies and Synthesis at INSEE “Resistance” of the French economy and its tourist attractions.

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“We limited the damage” on household consumption – which accounts for a large half of the country’s economic activity – “particularly because of public support”. After a weak first quarter, marked by the Omicron variant, inflation and the war shock in Ukraine, which had caused households to cut back their purchases significantly (−1.3%), the second quarter was slightly around 0, 2% back Consumption of services that compensate for the lower purchase of goods. In mid-2022, France’s growth overhang – the growth rate that would be achieved if growth were zero in the second half of the year as a whole – reached 2.5%, while the INSEE’s full-year forecast was 2.3%.

That said “We must remain cautious for the future”annoys Mr. Carnot, “because the horizon is darkening”. Monetary tightening aimed at curbing inflation could weigh on the general mood in the coming months and indicators for July show that household confidence is up “changes”, after Mr. Carnot. The French in particular are worried about their financial situation and are revising their plans for real estate investments and major purchases downwards. And with good reason: according to initial estimates published on Friday, July 29, consumer prices in France have risen by 6.1% over the past twelve months, after 5.8% in June.

“Dynamics that balance each other out”

This renewed increase is mainly due to food and services: food prices alone increased by 6.7% over the period, while services prices, which remained more stable in the first months of the year, are now up 3.9%. “Thanks to the end of the restrictive measures related to Covid-19, we manage to avoid a recession. confirms Stéphane Colliac, economist specializing in France at BNP Paribas. The impact of inflation alone would have justified a contraction in Q2 GDP, which technically would have plunged France into recession, but there are several dynamics that are offsetting each other. » On the negative side, energy consumption and food consumption – which account for no less than a third of total goods consumption – continue to trend downwards.

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Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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