France‘s GDP reported a 0.1% decline in the fourth quarter of last year, following on from growth of 0.4% in the third quarter, new data from Insee, the French statistics office, has found.
The decline was partly due to a slowdown in activity following the Paris Olympic and Paralympic Games, which had driven growth in the previous quarter.
Domestic demand
Domestic demand in the fourth quarter slowed slightly, the data showed, driven by household consumption, which rose by 0.4% (compared to +0.6% in the third quarter). Domestic demand made a 0.3 percentage point contribution to GDP in the fourth quarter.
Foreign trade, however, weighed negatively on GDP in the period, with exports falling by -0.2% and imports rising by +0.4%. This resulted in a negative contribution of 0.2 percentage points to GDP growth.
Elsewhere, changes to inventories also had a negative contribution to GDP growth, dropping by 0.1 percentage points after contributing 0.2 percentage points in the third quarter.
The total output of goods and services reported 0.1% growth in the fourth quarter (compared to +0.5% in Q3), while the output of market services was also up 0.1% (compared to +0.7%).
‘[Output] fell back in household services (-2.5% after +3.3%), as a result of the backlash after the sharp rise in the previous quarter linked to the Paris Olympic and Paralympic Games,’ Insee noted.
Household consumption
Household consumption of goods rose by 0.4%, (compared to +0.6% the previous quarter) driven by an increase in transport equipment purchases, while spending on energy, water, and waste services declined due to milder temperatures.
Overall, household consumption in 2024 grew by +0.9%, maintaining the same pace as 2023.
‘Household consumption of services slowed (+2.0% after +3.1%), due to accommodation and catering (+1.6% after +5.5%),’ Insee noted. ‘Consumption of goods struggled to stabilise (-0.2% after -1.6%), driven by the further decline in food (-1.7% after -3.5%) and despite the rebound in capital goods (+3.6% after -2.1%).’
Over the course of the year, France’s GDP reported a 1.1% increase, following on from 1.1% growth in 2023, but down on the 2.6% increase recorded in 2022, according to the data. Read more here.
