Informations Rapides · 28 May 2021 · n° 136

GDP was almost stable in Q1 2021 (-0.1%), the purchasing power of GDHI fell (-1.0%) but remained above its pre-crisis level Quarterly national accounts - detailed figures - first quarter 2021

In Q1 2021, gross domestic product (GDP) in volume terms* fell slightly:  -0.1% after -1.5% in Q4 2020. It stood 4.7% below its level in Q4 2019, which was the last quarter before the Covid-19 crisis.

Households’ consumption expenditure was almost stable (+0.1% after -5.6%) and remained well below its pre-crisis level (-6.8% compared to Q4 2019). Gross fixed capital formation (GFCF) increased slightly (+0.2% after +1.7%) and was closer to its pre-crisis level (-2.3%). Overall, final domestic demand excluding inventories contributed by +0.1 points to GDP growth this quarter.

Imports remained relatively dynamic (+1.1% after +2.2%), while exports fell slightly (-0.2% after +4.9%). Imports were thus 6.9% below their pre-crisis level, while exports remained further away (-9.9%). Overall, the external balance contributed negatively to GDP growth: -0.4 points, after +0.7 points. Conversely, changes in inventories made a positive contribution to GDP growth (+0.2 points after +0.6 points).

* Volumes are measured at previous year's prices, chain-linked and adjusted for seasonal variations and working day effects.

Gross disposable household income (GDHI) decreased slightly (-0.2% after +1.9%) but remained above its pre-crisis level (+2.3% compared to Q4 2019). The wage bill received by households rebounded (+0.5% after -0.7%) but remained 1.6% below its pre-crisis level. Employee social contributions paid by households also increased (+0.4% after +0.0%), while social benefits decreased slightly (-0.5% after +2.6%). Taxes on income and wealth increased (+0.8%) after a marked decrease in Q4 (-3.4%) : the expected mechanical rebound in housing tax was largely offset by the decline in income tax (the end of 2020 being marked by the regularization of withholding tax). Finally, the Solidarity Fund payments were down for individual entrepreneurs (IE) in Q1 2021, after a strong fourth quarter, also contributing to the decline in GDHI.

In addition, households’ consumption prices accelerated (+0.8% after +0.0%), notably as a result of the rise of enregy prices: therefore, the purchasing power of households’ GDHI fell more sharply (-1.0% after +1.9%). However, it remained above its pre-crisis level (+1,2% after +2,3%). Measured by consumption unit to bring it to an individual level, it fell by 1.1% (after +1.8%).

As a result of the decline in GDI and the slight increase in households’ consumption (see above), the households’ savings rate declined: it stood at 21.8% after 22.7% in Q1 2021, but still remained well above its 2019 level (15.0%).

Total hours worked were stable at +0.1% in the Q1 2021 (after -2.7%): the use of the partial activity scheme was reduced (contributing to an increase in hours worked) but total employment also decreased in parallel. Therefore, total hours worked remained way below their pre-crisis level (-6.8% compared to Q4 2019).

In Q1 2021, non financial corporations' profit ratio (NFCs) increased: it stood at 34.8% after 34.2 % in Q4 and 31.7% on average in 2020. This increase was mainly due to the measures of reductions in production taxes (notably CVAE and CFE), despite a slight decrease in the Solidarity Fund payments received by companies.

In Q1 2021, the general government deficit fell by 1.5 points. It stood at 9.4% of GDP after 10.9% in the Q4 2020 and 9.2% in 2020. Expenditure fell by €2bn, due in particular to the slight decline in subsidies paid to economic agents, while revenues rose by €7bn, driven by tax revenues (particularly corporate income tax) and social security contributions.

This publication, like the usual publications of May of Quarterly National Accounts, includes a general revision of the methods and models used to estimate the quarterly accounts: benchmark on the annual accounts for the years 2018 to 2020, re-estimation of the seasonal and working day adjustment models, and re-estimation of the benchmarking models. It is therefore common to exhibit marked revisions at this time of the year. This year, the revisions were particularly large, due to the atypical nature of 2020: the decline in GDP in the second quarter of 2020 was revised by +0.4 points to -13.2%, in line with the +0.2 points revision in annual growth for 2020. In addition, the estimate for Q1 2021 was revised by -0.5 points, mainly due to the inclusion of construction data, which was significantly less dynamic than the extrapolations used in the first estimate: the evolution of GFCF in construction in Q1 2021 thus fell from +5.1% to +0.6%.