France’s annual average growth likely to be 0.9% in 2023: INSEE

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In a global environment that seems relatively sluggish, and despite the slight rebound expected in household consumption, economic activity in France is likely to be slow in the second half this year (H2 2023), according to the National Institute of Statistics and Economic Studies (INSEE). Survey data suggest that H2 could see positive growth, but without much momentum.

The pace of growth is expected to be 0.1 per cent in the third quarter (Q3) this year and 0.2 per cent in Q4 after 0.5 per cent in Q2, bringing annual growth this year to 0.9 per cent on an average. At the end of 2023, the growth overhang for 2024 is expected to be modest.

Economic activity in France is likely to be slow in 2023 second half, according to the National Institute of Statistics and Economic Studies.
The average annual growth this year is expected to be 0.9 per cent.
As an annual average this year, inflation is likely to stand at 5 per cent and core inflation at 5.2 per cent.
The morale of business leaders is weakening.

As an annual average this year, inflation is likely to stand at 5 per cent and core inflation at 5.2 per cent.

Spring in the country was marked by a slowdown in consumer prices, with economic activity more dynamic than forecast, and certainly above its basic trend. Meanwhile, employment slowed.

The decline in the year-on-year (YoY) variation in consumer prices is expected to continue through to the end of this year, although it is likely to be slower than in May-June, with the energy contribution becoming positive once again.

Both headline inflation and core inflation look set to remain a little above 4 per cent YoY in December this year, said an INSEE release.

The morale of business leaders in the country is weakening and household confidence in the economic situation is struggling to recover, noted INSEE.

In August this year, the business climate dipped below its long-term average for the first time since April 2021. The employment climate also declined, returning almost to its average level.

Inflation is expected to continue to fall back until the end of the year, but more slowly than in the spring.

In August this year, core inflation continued to decline, but the volatile component of inflation rebounded, thus driving up headline inflation.

Retail prices of manufactured products in the country are also expected to slow a little year on year.

Fibre2Fashion News Desk (DS)


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