French growth seen fragile through 2023, inflation slowing – INSEE

PARIS (Reuters) – The French economy will grow 0.1% in the second quarter of the year, the INSEE statistics agency said, revising down an earlier forecast of 0.2% due to weak household spending and investment.

Further out, the euro zone’s second biggest economy is projected to expand by 0.1% in the third quarter and 0.2% in the fourth, making for an annual GDP figure of 0.6%, INSEE said.

“Household consumption is expected to weaken in the spring as a result of a further fall in food consumption, before recovering only slightly in the second half of the year”, INSEE said in updated outlook.

INSEE data suggested inflation has peaked, slowing to 4.4% in December on a non-EU harmonised basis from 5.9% in April and a projected 4.6% in June.

Inflation cooled more than expected last month to its lowest level in a year on an EU harmonised basis as energy and food prices moderated.

Food prices were poised to rise more slowly in the second half of the year while the services sector was expected to become the third biggest contributor to inflation after food and tobacco, INSEE said.

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