As France continues to experience a slow deterioration in its economic and social conditions, the Observatory of Territorial Impacts of Crises (OITC), whose mission is to continuously monitor and analyze the economic and social impacts of contraction and rebound movements in the economy in the territories in connection with the challenges of the transition, proposes in this new article to continue its monitoring and analysis by focusing on the first half of 2024. Previous posts are available here.
I. A gloomy and anxiety-provoking economic context despite some positive signals
Growth still weak, inflation under control but a recovery in consumption is still awaited
In an increasingly unstable geopolitical context, French growth remains moderate in 2024, with an increase of +0.2% in the second quarter after an increase of +0.3% in the previous quarter. In August 2024, the country's trade balance continues to slip slightly (-€0.2 billion) and stands at -€6.7 billion due to a decrease in exports (€49.9 billion) faster than imports (€56.6 billion) and despite an improvement in the energy balance (+€0.4 billion).
While inflation continued to turkey phone number list decelerate in September, reaching 1.2% over one year, compared to 1.8% in August, largely due to the fall in energy prices (particularly petroleum products), the slowdown in the prices of services and manufactured goods, food and tobacco prices continued to rise, which weighed on household purchasing power. Its increase in the second quarter (+0.3%) was actually more moderate than in the previous quarter (+0.5%), due in particular to the deceleration of social benefits after the pension revaluation episode and despite the increase in wages (+0.7%).
While INSEE identifies a slight recovery in household consumption in the second quarter (+0.1%), supported by an increase in the consumption of services (+0.5%) while the consumption of goods remained stable, marked by a notable drop in food consumption (-1.6%) offset by an increase in energy consumption (+3.0%), the data produced by specialist players show that its recovery is in reality slow in coming. While the Kantar market research institute points to a significant reduction in the size of the average household basket, the Circana Institute, which collects cash register data transmitted by stores, observes a reorientation of consumption practices towards less expensive and often lower quality products (particularly for health). In the same vein, the Research Center for the Study and Observation of Living Conditions (Credoc) even identifies a trend towards the convergence of consumption behaviors between populations in difficulty, executives and retirees. Another illustration of this breakdown is that new car registrations fell by 24.3% between August 2024 and August 2023, penalized by the high cost of vehicles, particularly electric ones. Caught in the grip of the recent inflationary surge in consumer products (particularly food) which is faster than that of wages, the consumer is not yet feeling the dynamics of price deceleration measured by INSEE.