France Current Account Balance (EUR bn)

GDP growth eased for a third successive time in quarter-on-quarter terms in Q4. The slowdown was driven by contractions in private consumption and exports, while fixed investment growth declined. That said, public spending remained stable. Turning to 2023, the economy should contract marginally in Q1. Inflation increased in January, and consumer confidence fell in January–February from Q4, suggesting household consumption is likely to decline further in the quarter. Moreover, ongoing strikes against the proposed pension reform will dent activity somewhat. That said, business confidence and the PMI rose through February, with the latter coming in above the expansionary mark for the first time in four months. These positive signals from the private sector bode well for investment and industrial output.