The French economy rebounded in the second quarter with a 0.9% increase in GDP, slightly better than expected, despite the country’s third confinement and gradual lifting of restrictions.
The GDP “is approaching its pre-crisis level,” the National Institute of Statistics and Economic Studies (INSEE) said Friday. INSEE expected growth to rebound by 0.7% in the second quarter, while the Banque de France estimated around +1%.
Growth in France benefited from an acceleration in investments (+1.1%) and household consumption (+0.9%), particularly in accommodation and food services and transport services, due to the reopening of bars and restaurants and resumption of travel.
However, INSEE warns consumption remains “well below its pre-crisis level”, specifies INSEE, having been further penalized by the closures of so-called non-essential shops, which has reduced purchases of manufactured goods.
On the production side, market services accelerated sharply (+2% after + 0.1% in Q1), in particular in the hotel and catering industry (+29.1% from -14%).
The production of goods rebounded (+0.6% from -0.2%), while construction continues to recover. Foreign trade continued to weigh on growth, with imports continuing to grow faster than exports.
For the year on a whole, INSEE expects growth at 6%, after the 8% recession suffered in 2020, a forecast similar to those of the government and the European Commission. The Banque de France is anticipating growth of 5.75%.
France’s GDP performance falls short of Spain (+2.8%), Italy (+2.7%) and Germany (+1.5%). The euro zone’s GDP rebounded 1.9% in the second quarter compared with the previous quarter, resuming growth after two consecutive quarterly declines, according to a first estimate by Eurostat, also published on Friday. In Q1, the euro zone’s GDP fell by 0.3%, after dropping 0.6% in the last three months of 2020. GDP across the European Union rose by 13.2% compared with the same period last year but has not returned to its pre-pandemic level.