22 September 2017

2017- n° 249

In Q2 2017 households' purchasing power accelerated Quarterly national accounts - detailed figures - second quarter 2017

In Q2 2017, the gross domestic product (GDP) in volume terms* kept increasing: +0.5%, for the third quarter in a row.

Households' consumption expenditure slightly accelerated (+0.3% after +0.1%) while total gross fixed capital formation (GFCF) slowed down (+0.9% after +1.4%). All in all, final domestic demand excluding inventory changes contributed +0.5 points to GDP growth after +0.4 points in the previous quarter.

Exports bounced back (+2.4% after −0.8%) while imports decelerated sharply (+0.3% after +1.2%). Overall, the foreign trade balance supported GDP growth: +0.6 points after −0.6 points in the previous quarter. Conversely, changes in inventories contributed negatively to GDP growth (−0.5 points after +0.7 points).

Households' gross disposable income (GDI) decelerated a little in Q2 2017 (+0.6% after +0.7%). Indeed, wages received by households slowed down (+0.8% after +1.1%); in the private sector, employment grew at a slightly slower pace than in the previous quarter and the average wage per capita decelerated. In the public sector, wages also decelerated as a repercussion of a raise in the civil service salary index point on 1^st February 2017. Furthermore, taxes on incomes and wealth, which include the general social contribution (CSG) and the income tax, kept increasing, as in the previous quarter (+0.8%).

Social contributions paid by households slowed down (+0.5% after +0.7%), as did the social benefits in cash they receive (+0.3% after +0.4%): the indexation of social benefits (family benefits, RSA and activity premium) on inflation led to a small raise on 1^st April.

Households' consumption prices retreated in Q2 2017 (−0.2% after +0.5%), so that households' purchasing power strongly accelerated (+0.8% after +0.2%). Measured per consumption unit to bring it to an individual level, it also sped up (+0.7% after +0.1%).

In Q2 2017, households' consumption in volume terms did not recover as much as their purchasing power did, thus their saving ratio increased, by 0.4 points: it reached 14.5% of their income, after 14.1%.

In Q2 2017, non-financial corporations' profit ratio was practically stable at 31.7% (after 31.6%). On the one hand, terms of trade sustained corporations' profit; on the other hand, real wages increased more than productivity.

Non-financial corporations' taxes on incomes and wealth rebounded sharply, because of corporate tax. All in all, gross savings of non-financial corporations decelerated. As investment slowed down similarly, their self-financing rate was virtually stable.

In Q2 2017, general government net borrowing decreased by 0.4 points, to 2.8% of GDP after 3.2%.

General government spending slowed down (+0.3% after +0.6%), after the backlash of the French contribution to the European Union budget coming back to normal. Moreover, general government wage bill and social benefits paid decelerated.

At the same time, receipts sped up (+0.9% after +0.6%) especially because of a significant rebound in corporation tax. Taxes on production as well as social contributions receipts slowed down.

Integration of new informations now available has not led to significantly review the estimates of GDP growth of the last three quarters. However, the growth rate overhang for 2017 has been raised by 0.1 points: it now stands at 1.4% at the end of Q2.