French economy fails to grow in fourth quarter - INSEE

The French economy failed to grow in the fourth quarter, preliminary data from the INSEE statistics agency showed on Tuesday, in line with analyst expectations. The euro zone's second-biggest economy stagnated at 0.0% in the final three months of last year after a flat third quarter, INSEE said in its quarterly GDP report.

The French economy failed to grow in the fourth quarter, preliminary data from the INSEE statistics agency showed on Tuesday, in line with analyst expectations.

The euro zone's second-biggest economy stagnated at 0.0% in the final three months of last year after a flat third quarter, INSEE said in its quarterly GDP report. The data for the third quarter was revised upwards from a 0.1% drop previously.

A Reuters poll of 29 economists had on average forecast a 0.0% change in gross domestic product (GDP) in the fourth quarter, with estimates ranging from -0.2% to +0.2%. The Bank of France said this month it had expected GDP growth of 0.2%.

Both French domestic demand and inventories negatively contributed to the French GDP in the quarter, detracting -0.1 and -1.1 percentage points, respectively. In contrast, foreign trade was a positive factor, contributing 1.2 percentage points, said INSEE.

On average, the French economy grew 0.9% in the whole of 2023, compared with 2.5% growth in 2022 and a 6.4% increase in 2021, the agency said. Separately, the German statistics office said today that Europe's largest economy shrank by 0.3% in the final three months of 2023.

Timo Wollmershaeuser, the Ifo institute's head of economic research, and other economists are warning of another technical recession for Europe's largest economy in the first quarter of 2024. The institute said earlier today that the German economy was expected to contract 0.2% in the first three months of the current year.