PARIS (Reuters) – Growth in the French economy was only 0.1% in the third quarter compared to the previous quarter, penalized by the contraction in foreign trade and changes in inventories which wiped out a good part of the acceleration of domestic demand, according to a first estimate published Tuesday by INSEE.

This figure marks a significant slowdown compared to the 0.6% increase (revised from 0.5%) in France’s gross domestic product (GDP) over the previous three months.

This slowed growth, however, corresponds to the forecasts of the Bank of France and economists polled by Reuters.

The Minister of the Economy welcomed the resumption of household consumption expenditure (+0.7% after zero growth in the second quarter), which prevented the French economy from contracting in the third quarter.

“This is proof that for the first time in many months, household income is increasing faster than inflation,” said Bruno Le Maire during a conference call with journalists.

“This resumption of consumption is all the more important as the household savings rate has exploded in recent months,” he continued, estimating that this rate, which rose from 15 to 19% in France, partly explains the growth differential with the United States where savings, on the contrary, fell from 9 to 5%.

Final domestic demand (excluding stocks) thus contributed positively to GDP growth in the third quarter (+0.7 points, after +0.2 points in the previous three months), notably offsetting the decline in foreign trade under the effect a clear contraction in exports (-1.4% after +2.4% in the second quarter).

Assuring that he had “kept (his) growth objectives for 2023” (Bercy forecasts +1.0% for the year), Bruno Le Maire estimated that the decline in inflation should allow the government to also achieve its objectives in 2024, currently in a range of 1.4 to 1.6%.


In October, inflation in France slowed significantly, falling to 4% after 4.9% last month, thanks to a lower rise in the prices of energy, food and manufactured products which offset a slight acceleration in service prices.

This downward trend, perceptible elsewhere in Europe, “is likely to continue, unless the conflict in the Middle East were to trigger an oil shock”, observes Sylvain Bersinger, economist at Asteres, in a note.

A risk recognized by the government: “we are perfectly clear about the risks linked to the conflict in the Middle East,” said Bruno Le Maire. “Any extension of the conflict will lead to a surge in the price of raw materials, a surge in energy prices and therefore an impact on European growth.”

Especially since the intrinsic outlook for the European economy is gloomy for the end of the year.

In October, private sector activity in the euro zone deteriorated more than expected as demand slowed, falling to a three-year low.

“The first indicators published for the fourth quarter are weak and suggest that the French economy risks continuing to slow down at the end of 2023,” says Charlotte de Montpellier, economist at ING.

“It seems very unlikely that we will see a rebound during the fourth quarter.”

(Written by Tangi Salaün, with Tassilo Hummel and Blandine Hénault, edited by Bertrand Boucey)

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