According to preliminary data from INSEE, the French economy experienced slight growth in the first quarter of 2023. The second-largest economy in the euro zone expanded by 0.2% in the first three months of the year, after a 0.1% growth in the previous quarter, as reported in INSEE’s quarterly GDP report.
Household spending saw an acceleration to 0.4% in the first quarter, up from 0.2% in the fourth quarter of 2023. A Reuters poll of 29 economists had projected an average growth of 0.1% in GDP for the first quarter, with estimates ranging from -0.1% to +0.3%. However, the actual growth reported for Q1 was stronger and aligned with expectations announced by Bank of France earlier this month.
The positive trend suggests that France is gradually recovering from the impact of COVID-19 pandemic and could have implications for future economic policies and developments in France. Analysts will continue to monitor economic indicators to assess sustainability of this growth trajectory and determine how long it will last before we see a slowdown or even another recession.
It is worth noting that while overall economic performance was better than anticipated by analysts, there were still some negative factors contributing to this slight growth rate such as low exports due to global supply chain disruptions caused by Covid-19 and strict lockdown measures implemented across Europe.
In conclusion, while there are still challenges ahead for France’s economy, recent data indicates that it is slowly recovering from its past struggles and is on a positive trajectory towards sustainable growth.