GDP growth records quickest upturn since Q3 2021 in Q2 2023
According to a preliminary estimate, GDP growth gathered traction to 0.5% on a seasonally adjusted quarter-on-quarter basis in the second quarter, from 0.1% in the first quarter. Q2’s reading marked the best result since Q3 2021 and came in well above market expectations.
Exports of goods and services bounced back, growing 2.6% seasonally adjusted quarter on quarter in Q2, which marked the best reading since Q4 2021 (Q1: -0.8% s.a. qoq). The rebound came on the back of a recovering automobile sector. In addition, imports of goods and services rebounded, growing 0.4% in Q2 (Q1: -2.0% s.a. qoq). The external sector was the sole engine of growth this quarter, contributing 0.7 points to the headline reading.
In contrast, private consumption fell 0.3% in the second quarter, which was below the first quarter’s 0.0% reading. Government spending, meanwhile, flatlined in Q2 (Q1: -0.2% s.a. qoq). Meanwhile, fixed investment bounced back, growing 0.1% in Q2, contrasting the 0.4% decrease recorded in the prior quarter. Overall, domestic demand remained a drag on activity, detracting 0.1 points from the headline reading.
On an annual basis, economic growth was stable at 0.9% in Q2 from the previous quarter.
Peter Vanden Houte, chief economist at ING, commented on the outlook:
“It remains to be seen whether this dynamic growth can be maintained. The third quarter might get a boost from a normalisation of tourism income after the more subdued Covid-19 years. However, according to the July PMI figures, the French economy started the third quarter of 2023 with the sharpest reduction in business activity since November 2020 with sentiment in both the manufacturing and services sectors below the 50-point boom-or-bust level. We, therefore, expect a deceleration of the growth pace in the second half.”
France GDP Chart
France GDP Data
|Economic Growth (GDP, ann. var. %)||1.8||1.9||-7.7||6.4||2.5|
|GDP (EUR bn)||2,365||2,440||2,317||2,500||2,638|
|Economic Growth (Nominal GDP, ann. var. %)||2.8||3.2||-5.1||7.9||5.5|