This estimate is well below expectations: INSEE had in fact forecast growth of 0.3%. The reason for this bad number: a decline in household consumption against a backdrop of inflation and the war in Ukraine.
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Posted and 29/04/2022 07:43
Update on 29/04/2022 09:00
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French economic activity is stagnating. According to a first estimate published on Friday April 29 by INSEEgrowth was zero (0%) in the first three months of 2022. This estimate is well below expectations: the National Institute of Statistics had indeed forecast growth of 0.3%, while the Banque de France was counting on a small increase in gross domestic product of 0.25%. The French economy is marking time after the strong recovery over the whole of 2021 (+7%).
The reason for this bad number: household consumption fell “clearly”, according to INSEE, against a backdrop of inflation and war in Ukraine. The very strong Omicron wave in January, the rise in prices, in particular of energy, accentuated since the outbreak of the war in Ukraine at the end of February, have thus constrained household spending, particularly in accommodation-catering and textile-clothing. Inflation hit 4.5% year on year in March, unheard of since the mid-1980s.