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French growth: a third quarter brightened by declining inflation

Dhe encouraging figures for French growth in the third quarter. According to the first estimates from INSEE published this Tuesday, October 31, inflation slowed significantly in France in October: it is at 4% over one year, after 4.9% in September. This drop in inflation is due, according to the Institute of Statistics, to the slowdown over one year in the prices of energy, food and, to a lesser extent, manufactured products. The prices of services would accelerate slightly, points out INSEE. Faced with these figures, the Minister of the Economy Bruno Le Maire is optimistic: “We are emerging from the inflationary crisis,” he declared in reaction to the figures.

Growth in France’s gross domestic product (GDP), on the other hand, slowed to 0.1% in the third quarter. It owes its positive rate to the rebound in household consumption, another piece of good news that accompanies the drop in inflation.

This modest increase in GDP, between July and September, in line with the forecast of the National Institute of Statistics, marks a clear slowdown compared to the growth of 0.6% recorded in the second quarter – INSEE has revised it up 0.1 points.

For the whole of 2023, INSEE anticipates growth of 0.9%, identical to the forecast of the Banque de France and a little below that of the government (+ 1%). Business investment continued to show dynamism (+1.5%). On the other hand, after a dynamic second quarter, exports contracted by 1.4% over the period, so that the contribution of foreign trade to growth is negative. Manufacturing production also fell, by 0.3%, and that of market services slowed to 0.3%.

Household spending up slightly

After sluggishness, household consumption of goods and services is starting to rise again: this increased by 0.7% in the third quarter, marked in particular by an increase in food consumption, in a context of easing of the economy. ‘inflation.

Thus, French household spending on consumer goods experienced a slight rebound of 0.2% in September, driven by an increase in purchases of food products (+ 1.2%), INSEE further indicated on Tuesday.

This slight rebound is mainly due to a 1.2% increase over one month in purchases of food products, after a drop of 0.3% in August.

Food consumption has been driven upwards by the increase in purchases of agri-food products, notably drinks, bakery and pasta, while tobacco consumption is decreasing again, details INSEE.

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