Informations Rapides · 31 October 2023 · n° 275

GDP grew modestly in Q3 2023 (+0.1% after +0.6%) Quarterly national accounts - first estimate - third quarter 2023

In Q3 2023, gross domestic product (GDP) slowed down: it increased by 0.1% in volume terms*, after +0.6% in the previous quarter.

Final domestic demand (excluding inventories) accelerated and contributed positively to GDP growth this quarter (+0.7 points after +0.2 points in Q2 2023), due to the combined rise in household consumption (+0.7% after 0.0%) and gross fixed capital formation (GFCF, +1.0% after +0.5%).

Conversely, foreign trade shrank in Q3 2023: exports fell back sharply after a buoyant second quarter (‑1.4% after +2.4%), as well as imports to a lesser extent (-0.5% after +2.5%). Against this backdrop, foreign trade contributed negatively to GDP growth this quarter (‑0.3 points after ‑0.1 points).

Finally, the contribution of inventory changes to GDP growth was negative this quarter (‑0.3 points after +0.5 points in Q2 2023).

_{* Volumes are measured at previous year's prices, chain-linked and adjusted for seasonal variations and working day effects (SA-WDA).}

Total production (goods and services) slowed in the third quarter of 2023 (+0.2% after +0.8% in the previous quarter).

Manufacturing industry production fell slightly (‑0.3% after +1.1%), driven down by declines in transport equipment (‑1.7% after +3.7%), food industry (‑1.3% after +0.7%), and “other manufactured products” (‑0.3% after +0.4%) and despite a sharp acceleration in refineries (+7.0% after +1.6%). In addition, production of “energy-water-waste” slowed sharply this quarter, growing by +0.9% after +3.1%.

The production of market services slowed this quarter (+0.3% after +0.7%) due in particular to the fall in production of transport services (‑1.2% after 0.0%) and in the accommodation and catering sector (‑0.3% after +1.1%), while activity in the information and communication remained buoyant (+1.5% after +1.8%).

Household consumption accelerated in the third quarter of 2023 (+0.7% after 0.0%) due to the rebound in household purchases of goods (+0.8% after ‑0.6%). In particular, food consumption was back on the rise (+0.7%), after eight consecutive quarters of decline (revised methodology, see the monthly publication Household consumption expenditure on goods – September 2023). Similarly, purchases of capital goods rebounded this quarter (+3.2% after ‑0.8%), while spending on transport equipment accelerated (+2.3% after +1.4%).

Conversely, household consumption of services slowed (+0.4% after +0.8% in the second quarter). In particular, consumption of transport services slowed sharply this quarter (+0.3% after +2.8%) while spending on accommodation and catering fell back slightly (‑0.1% after +1.9%).

Total GFCF accelerated in the third quarter of 2023 (+1.0% after +0.5%), driven mainly by buoyant GFCF in manufactured goods (+2.6% after +0.3%): investment in capital goods rebounded (+1.5% after ‑1.3%), while investment in transport equipment accelerated after an already dynamic second quarter (+5.9% after +4.3%). In addition, GFCF in market services kept increasing, rising by +1.1% as in the previous quarter, due to buoyant investment in information and communication (+2.5% after +2.8%) and despite the continuing fall in investment in real estate transaction services (‑6.9% after ‑3.9%). Investment in construction remained stable.

By institutional sector, growth in GFCF was driven by investment by non-financial companies (+1.5% after +0.9%). Household and general government GFCF were virtually unchanged over the quarter.

The contribution of foreign trade to GDP growth was negative again in Q3 2023 (‑0.3 points, after ‑0.1 points in the previous quarter), as exports declined more sharply than imports.

Exports shrank significantly in the third quarter of 2023 (‑1.4% after +2.4%). In particular, they were driven down by exports of transport equipment (‑5.5% after +9.9%), capital goods (‑1.9% after +2.3%), agricultural products (‑2.8% after +5.1%) and “other manufactured products” (‑0.5% after +1.9%). Exports of services fell again (‑1.1% after ‑1.5%), with a further drop in exports of transport services (‑3.0% after ‑5.0%).

Imports also fell this quarter (‑0.5% after +2.5%), but to a lesser extent than exports. They were hit particularly hard by the contraction in imports of manufactured goods (‑2.6% after +2.6%), especially imports of refined oil (‑9.2% after +11.4%), capital goods (‑4.0% after +1.6%), and “other manufactured products” (‑2.6% after +2.8%). Conversely, imports of services accelerated (+2.0% after +0.3%), particularly transport services (+4.8% after +0.6%) and information and communication (+2.7% after +0.6%).

The contribution of inventory changes to GDP growth was negative this quarter: ‑0.3 points, after +0.5 points in Q2 2023. Negative contributions were particularly marked for agri-food products, capital goods and “other manufactured products”.

The estimate of GDP growth has been revised upwards by 0.1 points (after rounding) in the second quarter of 2023. GDP thus increased by +0.6% in Q2 2023. In particular, GFCF (notably construction) and household consumption (notably the adjustment for spending by resident and non-resident tourists) have been revised upwards, so that the contribution of final domestic demand to growth has been adjusted upwards by 0.4 points, at +0.2 points (compared with ‑0.2 points in the previous publication). In addition, imports have been revised significantly upwards and exports slightly downwards: the contribution of foreign trade has therefore been revised downwards by 0.4 points, to ‑0.1 points, compared with +0.3 points in the previous publication.

Since the previous publication, new information has been incorporated and the seasonal adjustment (SVA) and working day adjustment (WDA) coefficients have been updated.

In addition, a new method of estimating food consumption based on indicators constructed from checkout data (for supermarket purchases) and turnover indices (for purchases in specialised stores) has been implemented for data from 2020 onwards. This change has led to a significant upward revision in food consumption over the most recent quarters. The diagnosis of an unprecedented fall in food consumption is not called into question, but the scale of this fall since mid-2021 has been reduced by around a third. This revision has a small positive effect on GDP growth via retail margins and VAT, with most of the counterbalance coming in the form of smaller changes in inventories.