France’s economy showed no growth in the first quarter of 2024, according to data released by the national statistics institute INSEE on Thursday. Weak domestic demand and a sharply negative balance of foreign trade were the main factors behind the flat performance.
The preliminary estimate of first‑quarter gross domestic product (GDP) confirms the impact of the war that erupted in the Middle East on 28 February, which has disrupted trade flows and heightened uncertainty in global markets. INSEE’s figures show that while internal consumption remained subdued, exports fell sharply and imports rose, resulting in a net contraction that offset any modest gains in other sectors.
Just two weeks earlier, the Banque de France projected that the economy could expand by up to 0.3 percent between January and March. At the end of March, INSEE itself had revised its forecast from 0.3 percent to 0.2 percent growth. The latest data therefore represents a further downgrade, underscoring the fragility of the recovery.
Key points from the report include:
- Domestic demand: Household consumption and private investment failed to register any significant increase, reflecting lingering consumer caution and a slowdown in business spending.
- Foreign trade: The trade balance turned sharply negative, driven by a decline in exports and a rise in import volumes, partly linked to higher energy and raw‑material costs stemming from geopolitical tensions.
- Sectoral performance: Services, which usually support French growth, showed only marginal improvement, while manufacturing output contracted amid supply‑chain disruptions.
The stagnation follows a period of modest expansion in 2023, when the French economy grew by around 1 percent. Analysts note that the current slowdown could have broader implications for the eurozone, given France’s status as the bloc’s second‑largest economy. Persistent low growth may pressure the European Central Bank’s monetary policy stance, especially if inflation remains above target.
In response to the data, the French government is expected to reaffirm its commitment to fiscal support measures aimed at stimulating demand, while also monitoring the evolving situation in the Middle East for further trade repercussions. The next full quarterly estimate, due later this year, will provide a clearer picture of whether the economy can rebound or if the zero‑growth trend will persist.
The report was first published by Channels Television and disseminated through AFP.
