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Edition January 22, 2019 - Crédit Agricole S.A.
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  • Edition January 22, 2019

    France – 2019-2020 Scenario: more dynamic purchasing power but growth slowdown confirmed

    In France, growth has slowed significantly compared with the previous year. Following the publication of the Q3 GDP figure, the growth carryover came out at 1.5% in 2018, compared with 2.3% in 2017. Q1 was effectively disappointing, with growth then firming up slightly in Q3. That said, it is likely to return to a more modest rate at the end of the year, largely due to the effects of the Gilets Jaunes crisis. Going forward, we are forecasting a likely similar annual growth rate in 2019, of 1.6%.

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  • Content:

    - Overview
    - Focus: the gilets jaunes crisis
    - Recent activity trends
    - Scenario

  • Extract:

    The outlook for household consumption remains dependent on the timetable for the roll-out of fiscal and social security measures. In 2019, it looks set to pick up on a one-off basis (1.9% compared with 0.9% in 2018), in view of the roll-out of the measures announced in the aftermath of the Gilets Jaunes crisis. These measures add up to around 10 billion euros and are targeted at workers and retirees on modest and average incomes. They will drive a marked additional gain in purchasing power of 0.7% in 2019. In 2020, the rate of growth in household consumption is forecast to slow, largely due to moderation in the pace of job creation. 

    Investment by non-financial companies is forecast to continue growing for the sixth year in a row in view of value-added and corporate profits dynamics and a very low cost of borrowing. We are nevertheless revising our forecasts downwards in view of the deteriorating economic environment surveys. Business investment is forecast to rise by 3.3% in 2019, and then by 2.8% in 2020, compared with 3.9% in 2018.

  • Associative topics : Economics | France


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