Growth in France slowed sharply, food prices rose

Progress in France slowed sharply, meals costs rose

This wasn’t the horrific recession but, however it might have been a preconceived notion of 2023 for the French economic system.

In line with the most recent INSEE financial forecast, revealed on Wednesday 7 September, development for 2022 ought to stand at 2.6%, with the third quarter anticipated to be sluggish (+0.2% development as a substitute of +0, 3% anticipated earlier than summer time) and the fourth sluggish (+ 0.0%, as a substitute of +0.3%). Sharp brakes after a 6.8% rebound in 2021, and above all modest momentum to begin 2023. At this level, development for subsequent yr is barely round +0.2%.

Learn additionally: This text is reserved for our subscribers French development resists, however 2023 guarantees to be dangerous

As soon as once more, these forecasts for France are a part of a “central” situation, reminds us Julien Puget, head of the financial state of affairs on the Nationwide Institute of Statistics and Financial Research. In different phrases, issues can go higher than anticipated, however they’ll additionally go badly. As power isn’t recognized and rates of interest are rising, there was a contraction in GDP within the final quarter – marking step one in direction of a recession, which assumes a decline in two consecutive quarters – “To not be dominated out in case of additional power provide difficulties in Europe”, Insee admits. We should consider different dangers, geopolitical, well being and even climatic. ‘Danger of recession is rising’For his half, warned throughout a speech in Brussels, the European Commissioner for the Economic system Paolo Gentiloni. “We could possibly be headed into one of many hardest winters in generations.”

In the beginning of the 2022 faculty yr, it was primarily manufacturing tensions – provide issues, labor shortages, labor shortages – affecting exercise and protecting inflation in examine. The slight dip in costs in August, when worth hikes over the previous 12 months fell to five.8% as a substitute of 6.1% in July, ought to solely be non permanent. In line with the Nationwide Institute of Statistics and Statistics, inflation will attain 6.6% on the finish of December. The quantity could be a lot increased with out the worth protect, lowering the worth improve by 2.5 factors. On common over the yr, costs may have elevated by 5.3% in 2022, in comparison with 1.6% in 2021.

Little room for different bills

Above all, inflation, which primarily affected power at first of the yr, is spreading increasingly more in all areas of the economic system, particularly within the area of meals. INSEE introduced that the worth improve on retailer cabinets might strategy 12%, whereas manufactured items will present a rise of about 5%. The meals element is now primarily answerable for the worth hike in France, and thus the power doubling. outbreak This is because of increased manufacturing costs Mr. Puget explains, whether or not it is direct agricultural costs or the worth of power wanted to remodel, retailer or transport meals. In a single yr, manufacturing costs rose 35% within the agricultural sector, 20% in business, and seven% in providers.

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