French Economy Shrinks In Q4

(RTTNews) - The French economy contracted for the first time in nearly two years in the fourth quarter as the positive impact of the Paris Olympics and Paralympic Games faded, official data revealed Thursday.

Gross domestic product shrank 0.1 percent sequentially after expanding 0.4 percent in the third quarter, first estimate from the statistical office INSEE showed.

This was the first quarterly fall since the March quarter of 2023, when GDP fell similarly by 0.1 percent. Detailed data for the fourth quarter is due on February 28.

The expenditure-side of GDP showed that household spending growth softened to 0.4 percent from 0.6 percent. Gross fixed capital formation slid 0.1 percent, slower than the 0.3 percent drop in the preceding quarter.

General government consumption gained 0.4 percent, slightly slower than the 0.5 percent rise a quarter ago.

Overall, domestic demand excluding inventories made a positive contribution to GDP growth of 0.3 points compared to 0.4 points in the third quarter.

The contribution of foreign trade to growth was again negative in the fourth quarter, down 0.2 points as exports declined 0.2 percent after a 0.8 percent drop. Meanwhile, imports rebounded 0.4 percent, offsetting a 0.4 percent decrease in the third quarter.

Finally, changes in inventories made a negative contribution to GDP this quarter by 0.1 points after 0.2 points rise in the third quarter.

In 2024 as a whole, GDP grew 1.1 percent, the same pace of growth as seen in 2023 and 2.6 percent in 2022.

Another data from the statistical office INSEE showed that household consumption increased sharply in December driven by the rise in purchases of engineered goods, especially transport equipments.

Household spending grew by more-than-expected 0.7 percent in December after a 0.2 percent increase in November. Consumption was expected to rise 0.1 percent.