In Q2 2021, gross domestic product (GDP) in volume terms* rebounded (+1.1%) after being stable (0.0%) in the previous quarter. GDP thus closed one quarter of the gap to its pre-crisis level remaining at the end of 2020: it stood 3.2% below its level in Q4 2019, as compared to 4.3% in the last two quarters.

Final domestic demand (excluding inventory changes) made a positive contribution to GDP growth this quarter (+1.2 points). In particular, gross fixed capital formation (GFCF) accelerated significantly (+2.4% after +0.4%) and exceeded its pre-crisis level for the first time (+1.4% compared to Q4 2019). Household’s consumption expenditure recovered as well (+1.0% after 0.0%) but remained well below its pre-crisis level (-5.9% compared to Q4 2019).

Imports (+1.7%) increased more than exports (+1.0%): therefore, foreign trade contributed negatively to GDP growth (–0.2 points). Foreign trade remained well below its pre-crisis level: –5.8% below Q4 2019 for imports and –9.5% for exports. Lastly, inventory changes contributed positively to GDP growth this quarter (+0.1 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) picked up in Q2 2021 (+0.8% after -0.1%) and remained thereby well above its pre-crisis level (+2.7% compared to Q4 2019). The wage bill received by households accelerated (+1.1% after +0.4%): total employment bounced back (+0.5% after 0.0%) in connection with the recovery of the economic activity, and the average wage per capita accelerated slightly (+0.6% after +0.4%). Overall, the wage bill got closer to its pre-crisis level (-0.6% compared to Q4 2019 after -1.8% in the previous quarter). Employee social contributions paid by households also accelerated (+0.7% after +0.5%), while social benefits rebounded slightly (+0.3% after -0.6%) in connection with unemployment benefits and sick leave, whereas paid amounts related to partial activity decreased again.

In Q2 2021, households’ consumption prices slowed down after a strong rise in the previous quarter (+0.2% after +0.8%). Therefore, the purchasing power of households’ GDHI bounced back (+0.6% after -0.9%) and stood above its pre-crisis level (+1,4%). Measured by consumption unit to bring it to an individual level, it rose by 0.5% (after -1.0%).

The households’ savings rate declined for the second consecutive quarter due to the rebound of the household’s consumption and despite the increase of the GDHI, but the decrease remained limited: 21.4% after 21.6% in Q1 2021; it remained well above its 2019 level (15.0%).

Total hours worked increased by 1.2% in Q2 2021 (after +0.3%): the use of the partial activity scheme declined and total employment picked up. However, total hours worked remained way below its pre-crisis level (-5.4% compared to Q4 2019, after -6.6% in Q1).

In Q2 2021, non financial corporations' profit ratio (NFCs) stepped back slightly: it stood at 35.4% after 35.9 % in Q1. However, it remained well above its previous years level. As non-financial corporations’ added value move in line with the wage bill paid, the decline in Q2 was mainly due to the reduction of payments by the Solidarity Fund to corporations.

In Q2 2021, the general government deficit decreased by 0.2 points. It stood at 9.6% of GDP after 9.8% in Q1 2021 and 9.1% in 2020. This improvement was due to a slightly rise of revenues, driven by the rebound of the economic activity (increase of VAT revenues and social contributions). Expenditure remained stable, the increase of operating and investment costs being offset by a slightly drop of subsidies paid to economic operators.

The GDP growth estimate for Q2 2021 is revised upwards by 0.2 points. This revision is due to the integration of new data, and to the revision of existing indicators. However, the GDP growth overhang estimate for 2021 is not revised (+4.8%). In addition, in the context of the notification of the general government deficit to the European Union, annual accounts are updated every years at the end of August in order to take account of the last data of social security founds and revisions that might affect the general government deficit. By the way, annual tables of public finances have been updated and are available here.