January 31, 2023 06:38 GMT
Q4 Flash GDP Shows Substantial Decline in Demand
FRANCE Q4 FLASH GDP +0.1 Q/Q (FCST 0.0%); Q3 +0.2% Q/Q
FRANCE Q4 FLASH GDP +0.5% Y/Y (=FCST); Q3 +1.0% Y/Y
FRANCE DEC CONSUMER SPENDING -1.3% M/M; -5.6% Y/Y
- French GDP flash data showed the economy slowed to +0.1% q/q and +0.5% y/y in Q4, implying a 0.1pp upside surprise on the q/q print.
- Final domestic demand was a considerable downwards driver in Q4, contributing -0.2 points after +0.9 points in Q3.
- Gross fixed capital formation slowed, whilst net exports contributed positively (adding +0.5 points) after a previously negative contribution due to a sharp decline in (mainly energy) imports. Inventories contributed -0.2 points after +0.3 points in Q3.
- The substantial shift in final demand highlights that the French economy is slowing substantially. Manufacturing production declined, worsened by refinery strikes and services softened. All up total production was weaker at +0.2% vs +0.4% in Q3.
- Food and energy consumption drove the decline in Q4 household consumption. December consumer spending fell below expectations, declining -1.3% m/m and -5.6% y/y as demand weakened into the holiday season.
- The 1st estimate of the eurozone aggregate print, due at 1000 GMT, is forecasted to dip into a contraction at -0.1% q/q. This data will provide a marginal boost, yet the downside surprise in German GDP in yesterday's data will cancel this out.
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