France, the Eurozone’s second-largest economy, witnessed a notable acceleration in economic growth during the first quarter of 2024, sparking optimism for the region’s potential escape from recessionary pressures.
Data released today (April 30) revealed that France’s Gross Domestic Product (GDP) expanded by 0.2% compared to the final quarter of the previous year. This upturn was primarily driven by a rise in domestic demand, defying analysts’ more conservative estimates of a 0.1% expansion.
The robust GDP growth signals a promising trajectory for the Eurozone, which grappled with challenges including elevated inflation, increased interest rates, and subdued global demand, leading to GDP contractions in the latter half of 2023.
Today’s release underscores a positive outlook for the French government, with investments rebounding in the first quarter of 2024 following a contraction in late 2023. Additionally, consumer spending exhibited accelerated growth during the same period, with March alone witnessing a 0.4% surge compared to analysts’ expectations of a mere 0.2% expansion in February.
Despite ongoing concerns surrounding consumer and business confidence in the short term, the French Central Bank remains optimistic about economic prospects for the rest of the year and into 2025. Lower inflation rates are expected to bolster household purchasing power, contributing to sustained economic growth amidst prevailing uncertainties.