The French economy is showing resilience in the second quarter of 2024, with GDP growth of 0.3% according to INSEE. This performance, which is better than expected, comes in a context of a marked slowdown in the real estate sector.
Growth driven by exports
The 0.3% GDP growth in Q2 2024 exceeds economists' expectations. This rate, identical to that of the previous quarter, indicates a relative stability of economic activity in the face of current challenges.
THE trade proved to be the main driver of this growth, with a positive contribution of 0.2 percentage points. Exports benefited in particular from the delivery of a major vessel, highlighting the competitiveness of French industry in certain cutting-edge sectors.
Business investment saw a slight rebound (+0.1%), driven by the dynamism of the tertiary sector. This recovery, although modest, marks a break with two consecutive quarters of contraction.
Household consumption remained sluggish, with the decline in food purchases offset by an increase in energy and service spending.
However, real estate remains a weak point. Residential investment fell by 0.5%, mainly in new housing, reflecting structural difficulties in the housing market.
The Olympic paradox in the face of the real estate crisis
The contrast between the slight increase in GDP and the collapse of the French real estate market is striking. With a 22.6% drop in transactions over a year and a general depreciation of properties, the sector is going through its worst crisis in decades.
Paradoxically, the 2024 Paris Olympics could offer a temporary respite to the French economy. According to projections by the Centre for Sports Law and Economics (CDES) in Limoges, the event could generate between €5.3 and €10.7 billion in economic benefits for the Île-de-France region alone over the 16-year period.
This Olympic windfall could partially offset the losses in the real estate sector, estimated at several billion euros. However, the positive effect of the Games risks being short-lived in the face of a structural housing crisis.
French growth in the second quarter of 2024 reveals a two-speed economy. On the one hand, an unexpected resilience driven by exports and business investment. On the other, a real estate sector in full collapse that threatens the recovery. The impact of the Olympic Games will be crucial to maintain this fragile economic growth in the months to come.
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