INSEE confirms its growth forecast of 0,2% in the second quarter

In other words, even if growth were zero in the second half of the year, France would still register a half-percentage-point increase in its gross domestic product in 2023.

After 2,6% in 2022, the government expects GDP growth of 1% in 2023, a forecast higher than those of the Banque de France (0,6%) and the International Monetary Fund (0,7 %).

The weakness of economic activity can be explained in particular by the sluggishness of household consumption, the traditional driver of French growth.

"In the second quarter of 2023 (...) the consumption of goods, including food consumption in particular, should continue to fall back, while that of services should increase again slightly and energy expenditure should continue to rebound", anticipates INSEE. in his memorandum.

The strikes in the first quarter against the pension reform "do not seem, however, to have had a significant effect on consumption, except probably on that of rail transport", still note the statisticians.

With regard to inflation, which will rise in 2022 to levels not seen since the 1980s, INSEE predicts that the consumer price index will increase by 5,7% over one year in May and by 5,4% in June, after reaching 5,9% in April and more than 6% in recent months.

Food price inflation is the main cause of maintaining inflation at a high level: in April, it would thus have contributed “up to 40% to inflation, whereas it represents + only + 16 % of the average household consumption basket.

By June, "consumer prices for food products would maintain a sustained rate of increase (between 15 and 16% over one year)", anticipates INSEE, even if a possible reopening of trade negotiations between distributors and agro-food industries could lead to a "later slowdown".

In the second quarter, France's foreign trade "could support" growth slightly, while business investment should continue to slow and household investment to decline.