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France's preliminary Q2 GDP rose 0.5%

Christian Fernsby |
In Q2 2022, GDP in volume terms strongly recovered after the decline in the previous quarter (+0.5% after -0.2% in Q1).

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Foreign trade contributed to +0.4 points to GDP growth this quarter, after +0.1 points in the previous quarter. This large contribution is due to the dynamism of exports (+0.8% after +1.6% in Q1 2022), coupled with the decline of imports (-0.6% after +1.2%).

Conversely, the contribution of final domestic demand (excluding inventories) to GDP growth was null this quarter.

Household consumption expenditure fell again, but more moderately than in the previous quarter (-0.2% after -1.3%). Gross fixed capital formation (GFCF) continued to grow at a rather vigorous pace (+0.5%, as in the previous quarter).

Finally, the contribution of inventory changes to GDP growth was weakly positive this quarter (+0.1 points after +0.2 points in Q1).

Total production (goods and services) picked up in Q2 (+0.7%, after +0.2% in Q1 2022), particularly in market services (+1.4% after +0.3%).

In particular, the production of accommodation and food services rebounded sharply this quarter (+6.7% after -2.1% in the previous quarter) while the dynamism of the production of transport services increased (+3.8% after +1.3%). Business services (+1.2% after +0.6%) and household services (+1.5% after +0.4%) also clearly went up.

However, construction production fell this quarter (-0.5% after +0.6%).

The production of goods grew more moderately than the production of services this quarter (+0.2%, as in the previous quarter).

In particular, the production of the manufacturing branches slowed down after the rebound in the previous quarter (+0.6% in Q2 after +1.3% in Q1).

The slowdown is noticeable in "other manufactured products" (+0.1% after +2.0%) and in the "coke and refined petroleum" branch (+1.9% after +10.8%), while the production of food products, beverages and tobacco declined (-1.2% after +0.3%), as did the production of energy, water and waste for the second quarter in a row (-1.1% after -3.4%).

Conversely, the production of transport equipment rebounded (+4.9% after -2.3%) but remained still far below its pre-crisis level.

Purchases of goods decreased for the second quarter in a row (-1.3% after -2.1%, see Informations Rapides No. 199). However, consumption of services recovered significantly (+1.5% after +0.0%), particularly in the accommodation and food services (+8.9% after -2.5%), while consumption of transport services accelerated (+4.8% after +4.0%).

Consumption of goods and services in France was supported this quarter by the expenditure of foreign travelers in France. All in all, consumption expenditure of French residents decreased again in the second quarter (-0.2% after -1.3%).

The growth of GFCF remained rather sustained this quarter (+0.5% for the second quarter in a row). It remained mainly driven by GFCF in services (+0.6% after +1.0%), particularly in information and communication (+1.8% after +2.7%) and business services (+1.7% after -0.4%).

Conversely, GFCF in manufactured goods was stable this quarter (+0.0% after -1.2%), while GFCF in construction decreased (-0.5% after +1.0%).

The contribution of foreign trade was clearly positive this quarter (+0.4 points, after +0.1 points). Exports continued to grow (+0.8% after +1.6% in Q1), driven in particular by transport services (+6.3% after +5.0%) and spending made by foreign travellers in France (+8.6% after +5.0%).

Conversely, exports of goods fell (-0.6% after +1.4%), particularly in transport equipment (-3.8% after +11.5%) and food products and beverages (-1.7% after +0.1%).

Imports fell sharply this quarter (-0.6% after +1.2% in Q1). Imports of goods fell (-0.4% after +1.2%), notably those of refined petroleum (-9.9% after -22.2%), and other manufactured goods (-1.5% after +2.8%), and despite the rebound in imports of transport equipment (+3.7% after -5.1%). Imports of services (excluding tourism) also fell, but more slightly (-0.2% after +1.6%).

Finally, spending by French travelers abroad contracted significantly (-2.0% after -2.2%).

The drop in imports means that the increase in demand (external and domestic) this quarter was met by an increase in production and not by an increase in imports. This is in that sense that the fall in imports contributed to GDP growth.

The quarterly profile of GDP growth estimates in 2021 is revised, with an unchanged annual average: growth is revised by -0.2 points in the first quarter of 2021 and by +0.1 points for each of the last three quarters of 2021.

These revisions reflect an improvement in the estimation of the production in transportation services, as well as the incorporation of new data and revisions to existing indicators.

The growth overhang for 2022 is estimated at +2.5% at the end of the second quarter, instead of +1.9% at the end of the first quarter estimated in the detailed results for the first quarter of 2021.

About three quarters of the update to the 2022 growth overhang (+0.6 points) comes from the results in Q2 and about one quarter of the update comes from revisions in previous quarters.


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