France's Economy Did Not Grow In Q1 2022, GDP Growth Rate At Zero As Country Faces Energy Crisis And Record Inflation

by Swarajya Staff - Apr 29, 2022 01:28 PM +05:30 IST
France's Economy Did Not Grow In Q1 2022, GDP Growth Rate At Zero As Country Faces Energy Crisis And Record Inflation 
French President Emmanuel Macron.
Snapshot
  • Hit by serious energy crisis, soaring inflation and supply chain problems exacerbated by the Ukraine war, French gross domestic product (GDP) was unchanged in the first quarter of this year.

Hit by serious energy crisis, soaring inflation and supply chain problems exacerbated by the Ukraine war, French gross domestic product (GDP) was unchanged in the first quarter of this year.

The INSEE official statistics agency said preliminary data showed no change in GDP for January-March. The Q1 2022 GDP data represents a sharp decline from the final three months of 2021 when the euro zone's second-biggest economy expanded 0.8%.

"France’s economy unexpectedly stagnated at the start of the year, sounding an early warning of the damage to Europe from soaring energy costs and worsening supply snarls following Russia’s invasion of Ukraine." Bloomberg reported.

"Europe’s near-term outlook is exceptionally uncertain. Another round of sanctions -- including a possible ban on Russian oil imports -- risks hammering industry, while record inflation and plummeting confidence are jeopardizing consumer demand." the report further added.

Household -level spending, the strong pillar of French economy, contracted 1.3% in the quarter as consumer confidence waned amid concerns over soaring energy prices.

Inflation touched a new high of 5.4% in April.

Despite price caps introduced by the government, energy prices increaed by over 26%.

The latest economic numbers will pose a serious challenge to French President Emmanuel Macron as the country heads to elect a new parliament next month.

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