Despite the slowdown in the French economy, “permanent” news. News headlines and events from Last Minute France
PARIS. After the announcement by the International Monetary Fund (IMF) that the global economy grew by 0.2% more than expected, another positive news came from France. Despite the decline in the fourth quarter, the French economy managed to stay afloat.
With these numbers coming in “albeit smaller” than expected, the growth rate for 2022 has increased to 2.6 percent in the country. But at the same time, household spending, driven by falling food spending, has fallen significantly.
The gross domestic product (GDP) of the French economy grew by 2.6% in 2022 despite slowing down in the fourth quarter, according to data released this morning by the French National Institute of Statistics and Economic Research (INSEE).
The economy managed to maintain positive numbers in the fourth quarter of 2022 and grew by 0.1 percent. This figure increased by 0.2 percent in the previous quarter.
The numbers are higher than INSEE estimates: GDP grew by 2.5 percent in the fourth quarter and is “expected to contract by 0.2 percent.”
While economic growth in France fell by 7.9 percent in 2020 due to the pandemic, it fell to 6.8 percent in 2021 due to the COVID-19 outbreak and fell to 2.6 percent in 2022.
INSEE interpreted this trend as “after recovering at the end of the health crisis, the French economy showed significantly less dynamism at the end of the year due to declining household consumption driven by inflation.”
French Finance Minister Bruno Le Maire said immediately after the figures were announced that “French companies and their employees are showing exceptional resilience.” “These growth figures are indicative of the strong recovery of our economy from the COVID shock and its resilience in the face of the energy crisis,” Le Maire said.
Inflation continues to rise
On the other hand, December inflation surged to 6 percent year-on-year, while household consumption recorded a “sharp decline” of 0.9 percent, according to INSEE, on the back of rising inflation, dampening final domestic demand.
According to initial estimates released by INSEE, the consumer price index (CPI) rose 6% year-on-year in January after rising 5.9% in December.
7 consecutive months of reduced food consumption
Household consumption in the last three months of the year; It plummeted, punishing with a reduction in food purchases, leading to double-digit inflation. Household spending fell 1.3 percent in December, mainly due to pressure from food purchases, which fell 1.7 percent.
Food purchases have fallen for the seventh month in a row, down 2.8% for the entire fourth quarter of 2022. According to INSEE, this decline is attributed to double-digit food inflation, which has been weighing heavily on low-income households for months.
Conversely, foreign trade positively affected GDP growth, with imports falling more sharply than exports. Investment also lost momentum, although it continued to grow.
Rising energy prices
According to INSEE, energy prices in the country have also risen sharply for several months. Energy consumption by French households also increased by 0.7 percent in December. Statisticians emphasize that this new growth is mainly due to gas consumption, while electricity consumption continues to decline.
In the fourth quarter of 2022, energy consumption decreased by 5.5 percent compared to the same period, thanks to the government’s call for savings in the wake of the energy crisis and the impact of an unusually warm autumn.
Second wave of strikes
On the other hand, workers protesting against the government’s bill to raise the retirement age from 62 to 64, as well as rising prices and falling purchasing power, take to the streets today for the second time to resolve the general strike.
The workers, who will march in more than 200 locations across France, are asking the government to repeal “this law, which is unjust and does no good.”
Railway workers, refineries, civil servants, automotive, healthcare, education and service workers, students, teachers, police, diplomats, opposition parties and local governments support the general strike, which was decided unanimously by the 8 main trade union confederations organized in the country. .
The first protests in France on January 19 were 1 million 120 thousand people according to the police and 2 million people according to the trade unions. In the capital, Paris alone, 400,000 workers protested against the law. Unions say they expect millions of French people to take to the streets to protest the law.
The Ministry of the Interior deployed 11,000 police officers to secure the demonstrations. From the morning hours there were big traffic jams, especially in all public transport vehicles. Schools were disrupted and government administrative procedures slowed down. Some municipalities have closed their town halls so their employees can join the protests.
Macron: “Not one step back”
Polls show that the French do not support the law. Polls taken just before the second big wave of strikes show that 68 percent of workers still oppose the law.
However, President Emmanuel Macron said ahead of the demonstrations that “raising the retirement age to 64 is an obligation to protect the system and they will not back down.”
The unions responded that the wave of strikes would increase if the law was not withdrawn.
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