According to INSEE (National Institute of Statistics and Economic Studies), the growth of the French economy increased by 1.2%, which is better than last year with only 0.2% increase. 1.1% was announced previously and the government was hoping for 1%. This unexpected growth was achieved through “slight changes in different aggregates” used to calculate GDP, says INSEE. Many factors are related to the increase.
Firstly, the weather and Paris attacks during the fourth quarter 2015 allowed the acceleration of the purchasing power during all the year, rising by 1.8% compared to 1.1% in 2014. Expenses finally falling by 0.1% over the last three months of the year, against 0.2% reported in the previous estimation. Expenditure on energy (gas, electricity and refined petroleum products) slipped back sharply (-2.4% after +1.7%), notably because of temperatures above seasonal norms.
Household consumption expenditure fell back by 0.2% in Q4 2015 (after +0.5% in Q3). Expenditure on goods declined (-0.5% after +0.7%), in particular on energy and on clothing. On average over the year, household consumption accelerated (+1.4% in 2015 after +0.6%), recording its strongest increase since 2010.
Investment increased sharply and total GFCF accelerated in Q4 2015 (+0.7% after +0.1%). Investment in manufactured goods was more buoyant (+2.5% after +1.3%), notably in transport equipment. To a lesser extent, investment in market services ramped up too (+0.8% after +0.5%). Over the year 2015, total GFCF declined slightly: -0.2% after -1.2% in 2014.
Then, changes in inventories contributed +0.7 points to GDP growth in Q4 2015, as in Q3 2015. Refined petroleum products and equipment goods, in particular, were stockpiled. Over the year 2015, changes in inventories contributed +0.3 points to activity, after +0.2 points in 2014.
Finally, GDP growth estimation in Q4 2015 is revised upwards by 0.1 points: +0.3% instead of +0.2% initially. This revision is mainly due to the integration of new indicators not available for the first estimation, notably about household investment in new housing, spending on energy and foreign trade, and to revisions of indicators previously available.
BERKANI Ramy IEJ 1Bis