French GDP down 5.8%

  •   30/04/2020 - 14h10
  •   HARMANT Adeline

The results on French GDP and inflation for the first quarter of 2020, against the backdrop of the global health crisis, were, as expected, negative. We invite you to learn a little more about these economic publications that will mark this weekend.

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French GDP down 5.8%

The French GDP loses 5.8% in the first quarter of 2020 :

The first publication to remember for this morning of Thursday 30 April 2020 concerns the significant drop in France's GDP. Indeed, the latter was indeed posted for the first quarter of this year with a fall in volume of 5.8%. It is neither more nor less the strongest fall of the history of this indicator with regard to the history of the quarterly series of the INSEE, since 1949 and which is caused of course by the confinement of the population since the middle of March.

This drop in GDP is therefore explained by the pandemic of Covid-19 which has strongly paralyzed French activity since March as well as demand. We thus observe a fall of 6.1% in household consumption expenditure and gross fixed capital formation or GFCF falls even more spectacularly to -11.8%. As a result, final domestic demand outside of stocks has an impact of -6.6 points on the development of GDP in this first quarter.

On the other hand, there is also a drop in exports, which fell by 6.5%. Imports also fell, but less sharply, by 5.9%. Thus, foreign trade contributes to -0.2 points to GDP growth. Finally, we note a positive contribution of +0.9 points from the change in inventories.


French inflation estimated at +0.4% in April:

Another piece of data that we can analyze this morning concerns this time inflation in France for the month of April. Indeed, the provisional estimate that has just been made by INSEE for the month of April shows that consumer prices in France would be up by 0.4% in annual comparison with April 2019 after having already gained 0.7% during the month of March.

It is therefore a slowdown in inflation, which is probably the result of a significant fall in energy prices and an equally significant slowdown in the prices of services. However, with regard to food prices, the effect would be the opposite, with stronger year-on-year dynamics than in March.

Over one month, consumer prices would thus increase by 0.1% as was the case last month. In harmonized one-year data, this index would slow down to +0.5% after having gained 0.8% in March and in one month, it would increase by 0.1% as it did the previous month.

The impact of these two indicators on the French stock market should thus be felt during the coming sessions and invites traders to be cautious before this prolonged weekend.