France’s gross domestic product (GDP) has finally increased by 2.2% in 2017
Growth in France has been more dynamic than expected in 2017, reaching an unprecedented pace for the past ten years, good news as activity skyrockets at the start of the year.
GDP growth for 2017 is now estimated at + 2.2% in raw data and + 2.3% in data corrected for working days, according to the National Institute of Statistics and Economic Studies (INSEE), which publishes each year in spring the estimates of the annual accounts.
“We must go back to 2007, before the crisis, to regain growth at 2.4%,” said Mathieu Plane, an economist at the OFCE. In 2011, the post-crisis rebound reached 2.1% and 2% in 2010.
In a first estimate published at the end of January, INSEE estimated 1.9% growth rate recorded by the second economy of the euro area in 2017, before revising this figure in February, to 2% in data. corrected for working days.
– Motor investment –
“We have a more favorable message overall on foreign trade and investment,” summarizes Ronan Mathieu, head of the national accounts department at INSEE.
This new revision, which “confirms the intensity of the recovery in 2017”, is the result of “the dynamics of business and household investment,” says Plane.
The year 2017 thus marked a reversal of the trend: “the weak point is almost the consumption of the households” whereas this one had supported the growth in 2015-2016.
And foreign trade, which had started part of the recovery in 2015-2016, this time positively contributes, “what had not happened since 2012,” observes the economist.
This new diagnosis leads to a slightly lower revision of the public debt ratio (-0.2 point to 96.8%) and “expenditure, revenue and mandatory contributions” (-0.1 points), says INSEE in its “National Accounts Forecast” for 2015-2017.
The public deficit, however, remains unchanged at 2.6% of GDP.
– Impact on 2018 –
The economic growth forecast for the year as a whole should benefit from the momentum of 2017, which “positively plays for 2018”, despite the air gap at the beginning of the year, notes Mr. Plane.
Economic growth slowed sharply in France in the first quarter, falling to 0.3% from 0.7% in the previous quarter, due in particular to weak household consumption, according to an initial INSEE estimate published at the end of April. .
On Monday, the Bank of France estimated that GDP should grow by 0.3% in the second quarter, the same growth rate as in the first quarter.
Important for French growth, traditionally driven by household purchases, consumer spending by French households on goods remained almost stable in March (+ 0.1%). Industrial production fell 0.4% in March after recovering from 1.1% the previous month.
No worries at this stage, assured Tuesday a representative of the Elysee for whom this blow of slack “resembles a backlash of a particularly dynamic end of the year”.
“The leading indicators are quite robust compared to what we have known,” he observed before the AJEF, association of economic and financial journalists.
“Does that mean we will have such a high level of growth all the time, not especially, but that means it’s a good time to continue making the reforms,” he said.
The government, in its fiscal stability program released in mid-April, has bet on a growth of 2% this year. This figure is slightly higher than the Bank of France’s forecast (1.9%) but lower than that of the OECD (2.2%) or the IMF (2.1%).