2021.01.2906:10:00UTC+00France GDP Falls Less Than Expected In Q4

The French economy contracted less-than-expected in the fourth quarter as the impact of the recent curfews and restrictions related to Covid-19 pandemic was less severe than the first lockdown put in place during the March to May period, preliminary data from the statistical office Insee showed on Friday.

Gross domestic product fell 1.3 percent sequentially, in contrast to an 18.5 percent rise in the third quarter. Economists had forecast a quarterly decline of 4 percent.

The expenditure-side breakdown of GDP showed that household spending dropped markedly by 5.4 percent and government consumption fell moderately by 0.4 percent.

Meanwhile, gross fixed capital formation advanced 2.4 percent. Exports climbed 4.8 percent and imports were up 1.3 percent.

Overall, the foreign trade made a positive contribution to GDP growth by 0.9 points, after +0.8 points in the third quarter. Finally, changes in inventories made a positive contribution of 0.4 points versus negative 1.7 points a quarter ago.

In the fourth quarter, GDP was 5.0 percent below its level a year earlier. In the whole year of 2020, GDP fell sharply by 8.3 percent after rising 1.5 percent in 2019. The International Monetary Fund forecast the French economy to grow 5.5 percent in 2021 and 4.1 percent in 2022.

Another report from the statistical office Insee showed that household spending rebounded sharply in December on higher consumption of manufactured goods.

Household spending surged 23 percent in December from November, when consumption was down 18 percent due to the second lockdown.

Thus spending exceeded the December level by 3.7 percent. Manufactured goods consumption climbed 9.8 percent and food consumption rose 0.7 percent. Meanwhile, energy expenditure slid 5.1 percent.

In the fourth quarter, household consumption on goods decreased 3.1 percent, in contrast to a drop of 4.2 percent in the third quarter.