In France, the resumption of development will come by means of consumption | EUROtoday

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The terrace of a restaurant, in Paris, October 11, 2023.

Having stopped within the first quarter, like different international locations within the euro zone, the French financial system ought to restart at very sluggish velocity within the spring. According to the financial report printed by INSEE on Thursday March 14, it will end in zero development over the primary three months of the 12 months and low exercise, of 0.3%, within the second quarter. Inflation continues its sluggish decline: from 6.3% in February 2023, it fell to 2.9% in February 2024, and isn’t anticipated to exceed 2.6% at mid-year. “Disinflation is confirmed”, assures Dorian Roucher, head of the financial division.

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The finish of the inflationary disaster may gas households' want to eat, due to a slight improve in buying energy, of round 0.8%, in response to INSEE. On the one hand, as a result of, after two years of hindsight, “real wages would increase modestly at the start of 2024”. On the opposite hand, as a result of revaluation of retirement pensions and social advantages, with out forgetting “the dynamism of property income”. Hence a change within the financial system, which has primarily been pushed for the reason that well being disaster by enterprise spending: “The restart will be achieved more through consumption, while investment remains depressed”, says Mr. Roucher.

Food consumption, specifically, which has declined during the last two years, “would timidly begin to climb back up the slope”, in response to INSEE, in addition to bills linked to lodging and catering. This shift is accompanied by a change within the look of inflation: it now impacts providers extra, which move on the rise in wage prices of their costs, whereas the costs of meals merchandise and manufactured items might be extra secure. than during the last two years. Food inflation, which drove the rise in general costs between September 2022 and September 2023, may even fall to 1.2% in June, the bottom determine noticed since January 2022.

“Employment is growing less quickly than the active population”

But make no mistake: this restoration in consumption will stay reasonable. It is estimated at 0.3%, whereas in December 2023 forecasters have been nonetheless relying on 0.6% extra spending. In a context of main uncertainties, notably on the geopolitical stage, family confidence stays fragile. This is evidenced by the financial savings fee, which is able to stay at round 18% of revenue, two or three factors above the 2019 stage. Likewise, family funding, which primarily covers actual property acquisitions, will proceed to say no. , at the least over the primary half of the 12 months.

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https://www.lemonde.fr/economie/article/2024/03/14/en-france-la-reprise-de-la-croissance-se-fera-par-la-consommation_6222034_3234.html