Informations Rapides · 30 April 2021 · n° 111

GDP rebounded slightly in Q1 2021 (+0.4%), but remained below its pre-crisis level (–4.4% from Q4 2019) Quarterly national accounts - first estimate - first quarter 2021

Gross domestic product (GDP) rose again in Q1 2021: +0.4% after −1.4% in Q4 2020. However, the economic rebound was limited, as GDP is still 4.4% below its level of Q4 2019.

Final internal demand (excluding inventory changes) made a positive contribution to GDP growth this quarter (+0.9 points after −3.0 points in the previous quarter). Gross fixed capital formation (GFCF) intensified its dynamic (+2.2% after +1.3%) and households’ consumption expenditure picked up slightly (+0.3%), after a strong decline in the previous quarter (−5.7%).

In Q1 2021, exports declined (–1.5%) more than imports (–0.1%). Overall, foreign trade made a negative contribution to GDP growth this quarter: –0.4 points, after +1.2 points in the previous quarter. Lastly, the contribution of inventory changes to the growth of the GDP was null this quarter (+0.0 points after +0.4 points in Q4 2020).

Total production of goods and services rebounded slightly this quarter: +0.4% after –0.6% in Q4. However, goods production declined (−1.0% after +2.5%), notably in the manufactured industry (−1.2% after +2.6%). By contrast, construction bounced back strongly (+4.2% after −2.2%). The rebound was more moderate in both market services (+0.3% after −1.8%) and non-market services (+1.0% after −0.5%).

All in all, total production went slightly closer to its pre-crisis level (−4.3% from Q4 2019, after −4.6% in the precedent quarter), but sectoral disparities remained. Production in non-market services output stood over its pre-crisis level (+1.8% from Q4 2019). However, the activity in market sectors remained below its pre-crisis level, especially in market services (−5.6% from Q4 2019) and manufactured industry (−6.7%), but also in construction (−3.2%).

Household consumption expenditure rebounded only slightly this quarter (+0.3%), after a sharp decline in Q4 2020 (−5.7%), during which the second national lockdown was enforced. In particular, several sanitary restrictions remained this quarter and were likely to affect households’ consumption: curfews, closing of shopping centers, closing of restaurants and cultural sites, etc. Households’ consumption in manufactured goods rebounded moderately (+0.8% after −8.3%), while services consumption, which is more affected by sanitary restrictions, declined slightly (−0.6% after −7.3%).

All in all, households’ consumption stayed far below its pre-crisis level in Q1 2021 (–6.4% from Q4 2019, after −6.8% in the previous quarter).

In Q1 2021, GFCF accelerated (+2.2% after +1.3% in Q4 2020). GFCF seemed to be less affected by the pursuance of sanitary restrictions than the rest of the interior demand. In particular, GFCF in construction significantly bounced back this quarter (+5.1%, after −2.7%), as well as GFCF in manufactured goods (+1.7%, after –2.3%). However, GFCF in market services declined slightly (–0.4%, after +8.0%), in the aftermath of the large number of real estate transactions recorded at the end of 2020.

In Q1 2021, GFCF closed nearly by half the gap from its pre-crisis level (–2.5% from Q4 2019, after −4.6% in the previous quarter).

Imports were almost stable this quarter (–0.1%, after +1.7%): the increase of imports of refined hydrocarbon products imports (+11.3%) and of equipment goods (+4.4%) was offset by the decline of transport equipment imports (–7.7%). Exports decreased substantially (–1.5%, after +6.1%), mainly as a result of the fall of exports of transport equipment (–13.3%, after +16.8%) and of refined hydrocarbon products (−16.7%, after +1.8%). In total, the contribution of foreign trade to GDP growth was negative (−0.4 points), after a positive contribution in Q4 2020 (+1,2 points).

Finally, foreign trade remained largely below its pre-crisis level: exports were –11.3% below their Q4 2019 level, and imports were –8.4% below.

The inventory changes contributed for 0.0 points to GDP growth, after +0.4 points in Q4 2021.

The GDP growth estimate for Q4 2020 is revised downwards by −0.1 points, and stood at −1.4%. This revision is due to the integration of new data, and to the revision of existing indicators. Agents’ accounts now integrate the accounts of public administrations, published at the end of March. Thus, the series of the agents’ account were revised, notably the evolution of the purchasing power of households’ HDI (+0.2% instead of +0.6% in 2020) and the corporations’ profit ratio (30.4% instead of 29.3% in 2020). The quarterly national accounts may be revised on the next release (May, 28^th), as a result of the integration of the 2018 definitive, 2019 semi-definitive and 2020 provisory accounts, released at the same time. Furthermore, annual improvements of statistical procedures will also be integrated to the next release of QNA, which may also induce revisions.