French economy shows no growth in Q4 2023

02 Feb '24

2 min read

Pic: Adobe Stock

Insights

France's GDP remained stagnant in Q4 2023, mirroring Q3's performance.
Final domestic demand dipped, negatively impacting GDP by 0.1 points due to a decrease in GFCF.
Foreign trade boosted GDP by 1.2 points, thanks to a decline in imports and stable exports.
France's economy grew by 0.9 per cent in 2023, with a modest 0.1 per cent growth overhang for 2024.

France's economy showed no growth in the fourth quarter (Q4) of 2023, maintaining the same level of activity as in the previous quarter, according to the National Institute of Statistics and Economic Studies (INSEE). The country's gross domestic product (GDP) remained stable in volume terms, marking a period of economic stagnation after a series of fluctuating quarters.

The final domestic demand, excluding inventories, had a negative impact on the GDP growth for this quarter, contributing negatively by 0.1 points following a modest gain of 0.4 points in Q3 2023. This downturn was primarily due to a significant decrease in gross fixed capital formation (GFCF), which fell by 0.7 per cent after a slight increase of 0.2 per cent in the preceding quarter.

Foreign trade recovered in Q4 2023 positively contributed 1.2 points to GDP growth, a notable improvement from the 0.1 points in the previous quarter. This positive development was driven by a sharp decline in imports by 3.1 per cent, contrasted with a relatively stable export level, which saw a marginal increase of 0.1 per cent after a 0.6 per cent rise in Q3, as per INSEE.

The contribution of inventory changes to GDP growth remained negative, marking a 1.1 points deduction after a 0.3 points deduction in Q3 2023.

France's economy saw an annual increase of 0.9 per cent in 2023, a significant slowdown from the 2.5 per cent growth in 2022 and the 6.4 per cent surge in 2021. This yearly growth was predominantly buoyed by a sharp increase in the Q2 2023, while economic activity remained mostly unchanged throughout the remaining year. As 2023 drew to a close, the growth overhang for 2024 was pegged at a modest 0.1 per cent.

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