• World - Europe
  • Updated: October 31, 2023

France's Economic Growth Slows To 0.1% In Q3, Consumer Spending Remains Strong

France's Economic Growth Slows To 0.1% In Q3, Consumer Spend

Customers shop following the opening of an IKEA store in Nice, France, May 11, 2022. (Reuters Photo)

France's economic growth saw a significant slowdown in the third quarter, with an initial estimate indicating a 0.1% increase driven by robust consumer spending, as reported by the national statistics office on Tuesday.

This marks a notable deceleration from the 0.6% quarter-over-quarter growth recorded in the second quarter after INSEE revised the figure for that period. Despite this slowdown, there are encouraging signs in the French economy.

For the year 2023, INSEE anticipates a 0.9% expansion in the French economy, which aligns with the estimates of both the French central bank and the government's projection, slightly below the 1% forecast by the government.

Consumer spending, particularly on food, remains a significant driver of economic activity. French consumers, playing a pivotal role in generating demand, increased their consumption by 0.7%. Furthermore, business investment, contributing to growth, saw a rise of 1.5%.

Despite the positive aspects, France's economy faced certain challenges in the third quarter. Exports declined by 1.4% from July through September following a strong second quarter.

Manufacturing and services both contracted by 0.3%. These figures indicate a mixed economic performance during this period.

Economy Minister Bruno Le Maire expressed satisfaction that the French economy managed to continue growing, even amidst high interest rates aimed at curbing inflation. He noted that "in a degraded environment, the French economy is holding on."

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