Published On : 10/31/2023

French GDP growth slows, inflation eases

By Marine Strauss and Tassilo Hummel

PARIS (Reuters) -The French economy grew by 0.1% in the third quarter, with growth slowing from the previous quarter but staying just above zero thanks to household spending, preliminary data from the INSEE statistics agency showed on Tuesday.

Household consumption was up by 0.7%, while INSEE data also showed that inflationary pressures in the euro zone’s second-biggest economy continued to ease.

“The upturn in household growth is good news. It drove growth in the third quarter,” Finance Minister Bruno Le Maire told reporters, confirming a 1% full-year growth target for 2023.

Le Maire also said recent trends of easing inflation would allow France to meet its 2024 growth target of 1.4%.

ECB policymaker and French central governor Francois Villeroy de Galhau added inflation clearly had passed its peak in France, adding the state of the economy justified ECB’s last week decision to halt the rate hike sequence.

“Our monetary policy must now be guided by confidence and patience: confidence that we are making firm progress towards bringing inflation down to 2% by 2025; patience in stabilising interest rates at their current level for as long as is still necessary”, he said.

France’s third quarter growth was in line with forecasts. A Reuters poll of 26 economists had an average forecast of 0.1%, with estimates ranging from 0.5% to -0.3%.

The economy grew a revised 0.6% in the second quarter, INSEE said.

French inflation slowed in October as prices in the energy and food sector continued to ease, preliminary EU-harmonised data also showed.

Consumer prices rose 4.5% in October from a year earlier, after a 5.7% rise in September, INSEE said.

The inflation figure was in line with a consensus of 15 economists polled by Reuters.

(Reporting by Marine Strauss and Tassilo Hummel; Editing by Ingrid Melander and Benoit Van Overstraeten)

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