29 August 2019

2019- n° 221

In Q2 2019, GDP grew by +0.3%; households’ purchasing power decreased after significant increases and non-financial corporations’ profit margin grew again Quarterly national accounts - detailed figures - second quarter 2019

In Q2 2019, GDP in volume terms grew at the same pace as in the previous quarter: +0.3% (revised by +0.1% from the first estimate).

Household consumption expenditures decelerated slightly (+0.2% after +0.3%), while total gross fixed capital formation accelerated (GFCF: +0.9% after +0.5%). Overall, final domestic demand excluding inventory changes contributed 0.4 points to GDP growth, after 0.3 points in the previous quarter.

Imports curbed slightly (−0.2 after +1.1%) following the decline of oil purchases while exports remained stable (+0.0% after +0.1%). All in all, foreign trade balance contributed positively to GDP growth: +0.1 points, after −0.3 points in the previous quarter. Conversely, changes in inventories contributed negatively to GDP growth (−0.2 points after +0.3 points).

Households’ gross disposable income (GDI) decelerated in Q2 (+0.3% after +1.0%). Wages received by households decelerated (+0.2% after +1.3%) in the aftermath of the special bonuses paid by some companies in Q1. Social benefits in cash also slowed down (+0.3% after +1.0%) after the implementation of measures on the employment bonus in Q1. Social contributions paid by households started growing again (+0.4% after −0.3%) after the enactment of the exoneration of the contributions paid by employees on over-time. Taxes on income and wealth decelerated markedly in Q2 (+0.4% after +2.0%), the rebound in Q1 being linked to the decrease of the housing tax in late 2018.

Households’ consumption prices accelerated slightly (+0.4% after +0.2%) and the purchasing power of households’ GDI declined a little, after the previous quarter’s significant rise (−0.2% after +0.8%). When measured by consumption unit to bring it to an individual level, it also decreased but remained at a high level (−0.3% after +0.7%)

In Q2 2019, households’ consumption in volume terms increased (+0.2% after +0.3%) while their purchasing power decreased. As a consequence, households’ savings rate decreased: it stands at 14.9% after 15.3% in Q1 2019.

In Q2 2019, non-financial corporations’ profit ratio kept growing to stand at 33.1% (after 32.6%). In Q1 the rise was due to the accumulation of the CICE payment for 2018 and to its transformation into a contribution exoneration in 2019, but it was moderated by the rise of wages which were momentarily energised by special bonuses. In Q2, wages rose less rapidly and the profit margin kept growing.

In Q2 2019, general government’s net borrowing decreased by 0.1 points: the deficit stood at 3.4% of the GDP after 3.5%. Revenues rebounded (+0.5% after −1.5%). Social contributions recovered after the decrease in employer contributions in the previous quarter. Taxes on income and wealth grew, while corporate tax decreased less than in the previous quarter. The slight deceleration of expenditures (+0.3% after +0.4%) is mostly due to social benefits which were dynamic in the previous quarter (with the revaluation of the employment bonus).

The GDP growth estimate for Q2 2019 is revised upwards by 0.1 points to stand at +0.3%. This revision is due to the integration and revision of indicators, notably for the month of June, and to the update of seasonal adjustment coefficients.