28 February 2020

2020- n° 50

Purchasing power accelerated in Q4 2019 (+0.7%) and over the year (+1.9%) Quarterly national accounts - detailed figures - fourth quarter 2019

In Q4 2019, GDP in volume terms fell slightly: −0.1% after +0.3%. On average over the year, activity slowed down in 2019: +1.3% after +1.7% in 2018. Without working day adjustments, GDP growth also stands at +1.3% in 2019, after +1.7% in 2018.

Household consumption expenditures slightly decelerated in Q4 (+0.3% after +0.4%), while total gross fixed capital formation (GFCF) markedly decelerated (+0.2% after +1.3%). All in all, total domestic demand (excluding changes in inventories) slowed down: it contributed 0.3 points to GDP growth, after 0.7 points in the previous quarter.

Imports stepped back in Q4 (−0.4% after +0.4%) while exports were stable (+0.0% after −0.3%). All in all, foreign trade balance contributed positively to GDP growth: 0.1 points after −0.3 in the previous quarter. Conversely, changes in inventories contributed negatively to GDP growth (−0.5 points after –0.1 points).

Households’ gross disposable income (GDI) accelerated again in Q4 2019 (+0.9% after +0.6%), despite the slow down of gross payroll received by households (+0.4% after +0.7%) and of social benefits in cash (+0.5% after +0.6%, with a revaluation of adult disability allowance in Q4). Indeed, taxes on incomes and wealth sharply declined (−3,0% after +0.3%), in relation to the continuation of housing tax reduction for some households.

The deflator of household consumption increased in step with the previous quarter (+0.2%). Thus, the purchasing power of households’ GDI sped up (+0.7% after +0.4%). Over the year 2019, it also accelerated (+1.9% after +1.2% in 2018). When measured by consumption unit to bring it to an individual level, it accelerated in Q4 (+0.6% after +0.3%) and over the year: +1.4% after +0.7% in 2018.

In Q4 2019, households’ consumption in volume terms slightly decelerated (+0.3% after +0.4%) while the pursaching power accelerated. As a consequence, households’ savings rate increased: it stands at 14.9% after 14.5% in Q3 2019. On average over the year, households’ savings rate also increased of 0.5 points (14.7% after 14.2% in 2018).

In Q4 2019, non-financial corporations’ profit ratio slightly increased (+32.8% after +32.6%) . The value added slowed down, but this effect was offset by the slowdown of gross payroll. Furthermore, businesses have benefited, due to the switch of CICE (tax credit for comptetiveness and employement) into exemptions from employer contributions, of a supplementary 4 point decrease of employer contributions on October 1st (regarding unemployment insurance and retirement supplement). All in all, the negative contribution of productivity is offset by lower employer contributions and improved terms of trade.

On average over the year, non-financial corporations’ profit ratio increased : +32.5% after +31.2% in 2018. It has benefited of the “ double ” transition payment  of CICE : in 2019, corporations benefit both from the reduction in contributions and from the payment of CICE for 2018 wages.

The GDP growth estimate for Q4 2019 is confirmed at −0.1%. Slight revisions in different aggregates offset each other; they are mainly due to the revision of indicators and to the update of seasonal adjustment coefficients.

On annual average, GDP growth estimate is revised upward by 0.1 points, to +1.3% in 2019.