Informations Rapides · 29 January 2021 · n° 026

GDP declined in Q4 2020 (– 1.3%), marked by the second lockdown; over the year 2020, GDP declined by 8.3%. Quarterly national accounts - first estimate - fourth quarter 2020

In Q4 2020, GDP in volume terms fell back: –1.3% after +18.5% in Q3 2020. The loss of activity this quarter was marked by the lockdown in effect from the end of October to mid-December and by the curfews put in place during the months of October and December. Nevertheless, the total loss of activity was much more moderate than during the first lockdown in March-May 2020: in Q4 2020, GDP was 5.0% below its level a year earlier (year-on-year change), whereas the year-on-year decline was of 18.8% in the second quarter. Over the full year 2020, GDP fell sharply (–8.3%, after +1.5% in 2019). This first estimate of the annual decline in activity and of the rest of the annual aggregates, by sum of the four quarters, will be consolidated when the 2020 provisional annual account will be published at the end of May 2021.

The effects of the second lockdown were mainly reflected in household consumption expenditure, which fell back sharply (–5.4% in Q4 after +18.2% in the previous quarter). On the other hand, gross fixed capital formation (GFCF) continued its recovery (+2.4% after +24.0%). Overall, total domestic demand (excluding changes in inventories) fell again, contributing – 2.7 points to GDP growth this quarter after +19.4 points in the previous quarter.

Foreign trade also pursued its recovery. For the second quarter in a row, exports increased more than imports (+4.8% after +21.9% for exports and +1.3% after +16.2% for imports). Overall, the foreign trade made a positive contribution to GDP growth this quarter: +0.9 points, after +0.8 points in Q3 2020. Finally, changes in inventories made a positive contribution to GDP growth (+0.4 points after – 1.7 points).

Total production (goods and services) decreased by 0.7% in Q4 after a rebound of +18.0% in Q3 2020. Nevertheless, production of goods continued to rise this quarter (+2.3% after +19.0%), driven in particular by manufacturing industry, which seemed little affected by the measures of the second lockdown. Gas and electricity production also remained dynamic (+3.1% after +10.7%). In addition, construction was almost stable (+0.2% after +36.0%). Conversely, and due in particular to the closure of premises receiving public, production fell sharply in market services (–2.2% after +15.6%). Production also fell, but more moderately, in non-market services (–0.5% after +17.4%). All in all, the production of goods continued this quarter to move closer to its pre-crisis level (–4.6% year-on-year after – 8.2% in Q3), while services was again moving away from it (–5.0% year-on-year, after – 3.4% in Q3).

Household consumption expenditure fell sharply as a result of numerous store closures: –5.4% in Q4 2020 (after the +18.2% rebound in Q3 2020). While household consumption in food products rose slightly (+1.1% in Q4 2020 after –3.3% in Q3 2020), it fell sharply in manufactured goods (–8.5% after +39.3%) and services (–7.4% after +21.0%). The decline was also marked in energy (–3.9% after 15.9%), mainly due to lower fuel consumption resulting from reduced travel. All in all, household consumption was clearly moving away from its pre-crisis level (–6.8% year-on-year), whereas it had almost caught up with it in the previous quarter (–1.1% year-on-year).

Over the full year 2020, household consumption fell by 7.1%, after +1.5% in 2019.

In Q4 2020, total GFCF continued to rise (+2.4% this quarter, after +24.0% in Q3 2020). Total GFCF did not really seem affected by the second lockdown, unlike the first. Thus, GFCF in market services was very dynamic (+7.1% after +5.7%), driven in particular by a remarkably high number of property transactions, probably due to a catch-up effect from previous quarters. Finally, construction investment remained steady this quarter (+0.2%): although well below its pre-crisis level (–6.3% year-on-year), it did not collapse, contrary to what was seen in the first quarter (–32.4% year-on-year in Q2).

Over the full year 2020, total GFCF declined sharply (–9.8% after +4.3% in 2019).

For the second quarter in a row, exports increased more than imports (respectively +4.8% after +21.9%, against +1.3% after +16.2%). Indeed, the sectors that are buoyant for French exports (transport equipment, pharmaceuticals, etc.) continued to grow – with the notable exception of international tourism. Foreign trade thus made a positive contribution to GDP growth this quarter: +0.9 points, after +0.8 points in Q3 2020. The trade deficit narrowed: in current euros, it was reduced in Q4 2020 by half, compared to its low point in the second quarter (– € 9.4 billion in Q4, compared to – € 18.8 billion in Q2). However, foreign trade remained well below its pre-crisis level: –11.0% in volume terms year-on-year for exports this quarter, –8.1% for imports.

Over the full year 2020, the contribution of foreign trade to GDP growth was largely negative (–1.5 points).

Due to a differentiated impact of lockdown, which was more pronounced on demand than on production in Q4, inventory changes contributed +0.4 points to GDP growth this quarter, compared with –1.7 points in Q3 2020.

Over the full year 2020, changes in inventories contributed +0.2 points to GDP growth.

The GDP growth estimate for Q3 2020 is revised upward by 0.2 points to reach +18.5%. This revision is due to the integration of new data, to methodological adjustments, and to the revisions of existing indicators.