GDP achieves good performance in the second quarter, boosted by increased household consumption

An increase that sounds like good news. According to the INSEE, France's economic growth reached 0.3% in the second quarter. This moderate increase in GDP between April and June, in a highly uncertain national and international context, is higher than the National Institute of Statistics' forecast: the organization was planning for an increase of 0.2%. "This is really good news: 0.3 means that since the beginning of the year, we have had growth slightly above 0.5%," rejoiced Economy Minister Eric Lombard, interviewed on RTL this Wednesday morning, July 30.

As at the beginning of the year , inventories drove growth with a positive contribution of 0.5 points, after +0.7 points in the first quarter. Inventories represent goods produced but not yet sold at the end of a given period: in this case, aeronautical and automotive equipment. Their increase can mean a surplus of production in anticipation of a boom in demand. Or, less favorably, that the manufactured products did not find buyers. Excluding inventories, however, final domestic demand stagnated.

But inventories aren't the only reason for this increase: household consumption, a traditional pillar of growth, rebounded slightly, by 0.1%, after a 0.3% decline in the first quarter, driven by increased consumption of food products. In June, spending on goods accelerated by +0.6% compared to the previous month, after a 0.1% increase in May, according to figures published on July 30 by INSEE.

Households also consumed more services, while mild temperatures weighed on energy consumption , which fell by 2.4% (after +0.8%). "This recovery can be explained in particular by the timing of the Easter holidays at the end of April and favorable weather in April and May," explained INSEE.

In June alone, "energy consumption increased again, to + 3.5 % after + 2.1 % in May," according to revised data. This increase was "driven by electricity spending after the drop in April linked to unseasonably mild temperatures ," the Institute emphasizes. Spending on petroleum products rebounded, to +3.7%, after a drop of 3.1% in May, "due to the increase in fuel consumption."

Spending on manufactured goods, still in June, recovered to +0.5%, after -0.4% in May, "mainly due to the rebound in purchases of durable goods (+1.1%, after -0.8% in May)." Finally, spending on food goods fell again, by 0.9% after -0.3% in May, "due to the further decline in consumption of agri-food products." Tobacco consumption fell "moderately."

In April and June, investment plunged into the red (-0.3% after -0.1%), penalized in particular by construction. In an environment marked by the trade war initiated by the United States in April, the contribution of foreign trade to growth remained negative, at -0.2 points after -0.5 points, the slight rebound in exports having been offset by an acceleration in imports.