France's economic expansion picked up pace in the third quarter, driven by preparations for the Paris Olympic and Paralympic Games, while inflation experienced only a slight increase in November, according to official statistics released on Friday.
The country's gross domestic product (GDP) climbed by 0.4% over the quarter, consistent with previous estimates, reported the national statistics office INSEE. This marks an increase from the 0.2% rise observed in the second quarter.
A noticeable recovery in household consumption, which increased by 0.6% following stagnation in the previous quarter, was largely attributed to the surge in ticket sales for the Olympic and Paralympic Games. In contrast, gross fixed capital formation continued its decline, dropping by 0.7%, primarily due to a significant reduction in demand for manufactured goods. Overall, final domestic demand, excluding inventories, contributed positively to GDP growth by 0.3 percentage points during this period.
There was, however, a decline in trade activities, with exports reducing by 0.8% and imports falling by 0.6%. Consequently, the contribution of net foreign trade to GDP growth was negative, equating to -0.1 percentage points.
The change in inventories contributed modestly to GDP growth, adding 0.1 percentage points.
Separate data indicated a decrease in household consumption in October, largely driven by reduced spending on manufactured goods and energy. Household spending contracted by 0.4% month-on-month in October, reversing a 0.1% increase in September. Specifically, consumption of manufactured goods declined by 1.3%, and energy consumption dipped by 1.2%. Conversely, food consumption saw a rise of 1.2%.
In another report, INSEE revealed that consumer price inflation inched up to 1.3% in November from 1.2% in October, with expectations of it reaching 1.5%. The near steady state of inflation was attributed to decelerating food prices, countered by an increase in service prices and a slower decline in energy prices.
Similarly, the European Union's harmonized inflation rate edged up to 1.7% from 1.6% in October, aligning with expectations.
Monthly consumer price inflation eased to 0.1%, down from 0.3% in October. In parallel, the harmonized index of consumer prices registered a monthly decrease of 0.1% following a 0.3% rise.
The statistical office also noted in a separate statement that producer prices fell for the eleventh consecutive month in October. Producer prices dropped 5.7% year-on-year, moderating from a 6.9% decrease in September. Month-on-month, producer prices saw an uptick of 0.9%, following a minor 0.1% decline.
Additional labor market data showed that payroll employment rose by 0.2%, or 48,700 positions, in the third quarter, recovering from a 0.1% decrease, equivalent to a loss of 15,200 positions, in the second quarter.
