French growth crashes to zero in first quarter - Latest Updates on business and health
French growth crashes to zero in first quarter

French growth crashes to zero in first quarter

N Melo
by N Melo
May 1, 2022 0

French economic growth fell to zero in the first quarter of the year as households reduced their consumption due to rising inflation and the war in Ukraine, the national statistics agency said Friday.

The result was weaker than expected, with the central bank forecasting year-on-year growth of 0.25 percent, underlying the economic difficulties being faced across Europe.

The annual inflation rate accelerated to 4.8 percent in April, up from 4.5 percent the month before, statistics agency INSEE said in a separate statement.

The zero-growth figure puts an end to France’s strong economic rebound from the COVID-19 pandemic and poses a challenge to President Emmanuel Macron, who was re-elected last weekend.

Economic growth had been clocked at 0.8 percent in the last quarter of 2021 and 3.0 percent in the third.

European economies have been badly affected this year by supply problems linked first to the pandemic, then the war in Ukraine – as well as sanctions imposed on Russia following its February 24 invasion of its neighbor.

Many consumers say they are cutting back on their purchasing because of rocketing prices that have seen the cost of fuel reach record levels.

The French government implemented a cut of 15 centimes per liter at the pump for vehicle owners in April, which INSEE said would have an impact on the headline inflation rate.

The government has also capped electricity and gas prices this year, with total aid estimated at around 25 billion euros ($26 billion).

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