May 20, 2022
Shoppers in Paris

France’s economic growth has unexpectedly stalled in the first quarter of 2022, with consumer spending falling in the face of record high inflation.

Data published by the INSEE statistics agency showed no growth in the French economy in the first three months of the year. Analysts had projected a slowdown but had still expected nominal GDP growth.

Household spending, traditionally a major driver of French economic growth, fell by 1.3%, with concerns over rising prices and an unstable political climate dissuading consumer activity.

A separate INSEE report said that inflation had risen to a new record high of 5.4% in April.

The announcements put further pressure on President Emmanuel Macron following his recent re-election. The cost of living crisis dominated the election campaign, with far-right rival Marine Le Pen picking up an improved vote share on the back of discontent, and is likely to loom large over the upcoming legislative elections in France.

Macron’s government has put together a 25 billion euro package of measures to help protect those hardest hit by price increases, but opponents say the measures do not go far enough.

Should Macron fail to achieve a majority in the legislative elections he will face a continual fight to get policy passed over the next five years.