European Central Bank announces growth of half a point despite the war in Ukraine

Despite the war in Ukraine and the energy crisis, the economy of the euro zone is holding up well at the start of the year, said Christine Lagarde on Thursday, on the sidelines of the announcement of an increase in the key rates of the ECB. . A visible trend in France where, despite the sharp drop in household consumption, GDP remained in the green narrowly at 0.1% in the fourth quarter. As for annual growth, it reached 2.6% according to INSEE. Initially, the institute expected a decline of 0.2% in the fourth quarter, and annual growth of 2.5%.

The government has priced its 2023 budget around a very optimistic 1% growth forecast, and this scenario has gained some credence. Last fall, the International Monetary Fund and the Banque de France predicted a much lower growth rate. But the tide may be turning because the IMF has just raised its forecast for France, from 0.5 to 0.7% growth, a significant increase.

The drop in consumption by worried households

Of course, the French economy is no longer surprising: unemployment continues to fall and business start-ups are breaking records. “So it’s true that with the figures for the end of 2022, we are starting 2023 starting from a little higher than expected”, explains to the microphone of Europe 1 Julien Pouget, head of the economic department at INSEE. “What will come into play? The evolution of the energy situation and inflation. If inflation were to come down, purchasing power gains could come back and therefore, this would generate a little support for consumption households”, presses the specialist.

And at this stage, household consumption is showing worrying signs and for good reason, in the fourth quarter of 2022, it fell sharply, particularly with regard to food purchases.