French growth falls to zero in first quarter

PARIS: National statistics agency said Friday, French economic growth slowed to zero in the first quarter of this year as families cut back on spending owing to increasing prices and the conflict in Ukraine.

The outcome was less than predicted, with the central bank projecting 0.25 percent year-on-year growth, highlighting Europe’s economic challenges.

According to INSEE in a separate statement, the annual inflation rate increased to 4.8 percent in April, up from 4.5 percent the previous month.

The zero growth number puts a halt to France’s remarkable economic recovery from the Covid-19 outbreak and puts President Emmanuel Macron, who was re-elected last weekend, under pressure.

The economy grew by 0.8 percent in the fourth quarter of 2021 and by 3.0 percent in the third.

Supply issues connected to the virus, and then the conflict in Ukraine, have harmed European economies this year, as have sanctions placed on Russia following its February 24 invasion of its neighbour.

Many customers claim they are reducing their purchases as a result of the skyrocketing price of gasoline, which has reached all-time highs.

In April, the French government reduced the price of gasoline at the pump by 15 centimes per litre, which INSEE predicted would have an influence on the headline inflation rate.

This year, the government has also set a price restriction on energy and gas, with a total aid package of roughly 25 billion euros ($26 billion).

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