{"id":35856,"date":"2025-11-10T15:03:00","date_gmt":"2025-11-10T14:03:00","guid":{"rendered":"https:\/\/observatoirecetelem.com\/?p=35856"},"modified":"2026-09-11T14:31:25","modified_gmt":"2026-09-11T12:31:25","slug":"french-economic-growth-household-consumption-q3-2025","status":"publish","type":"post","link":"https:\/\/observatoirecetelem.com\/en\/consumption-minute\/french-economic-growth-household-consumption-q3-2025","title":{"rendered":"French economic growth: why is it rising without household consumption?"},"content":{"rendered":"<div class=\"container\">\n<p class=\"wp-block-paragraph\">INSEE has published its figures for the third quarter, and they came in above expectations:&nbsp;<strong>French economic growth reached 0.5%, compared with the 0.3% forecast by economists.<\/strong><\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">But the breakdown reveals an imbalance.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Total production of goods and services rose by&nbsp;<strong>0.8%<\/strong>, while business investment increased by&nbsp;<strong>0.9%<\/strong>. Household consumption, by contrast, grew by just&nbsp;<strong>0.1%<\/strong>.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">In other words, the economy is growing while one of its traditional engines remains almost at a standstill.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">What explains this gap? Why are goods and services following different trajectories? And what could these figures mean for retail at the end of the year?<\/p>\n<\/div>\n\n<div class=\"container\">\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"iframe-wrapper\"><iframe title=\"Consumption Minute #11 | The French Economy on the Move\" src=\"https:\/\/www.youtube.com\/embed\/pSRpi6VxCLU?feature=oembed\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>Key figures for the third quarter<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">\u2013&nbsp;<strong>+0.5% economic growth<\/strong>, compared with +0.3% expected by economists<br>\u2013 production of goods and services:&nbsp;<strong>+0.8%<\/strong>, compared with +0.3% in the previous quarter<br>\u2013 business investment:&nbsp;<strong>+0.9%<\/strong><br>\u2013 household consumption:&nbsp;<strong>+0.1%<\/strong><br>\u2013 consumption of goods:&nbsp;<strong>stable<\/strong><br>\u2013 consumption of services:&nbsp;<strong>+0.2%<\/strong><\/p>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>A positive surprise but an uneven one<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Beating economists\u2019 consensus forecast by two-tenths of a percentage point is significant at quarterly level.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">But the composition of that growth calls for a more cautious reading.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Growth is being supported by two main components&nbsp;<strong>production and investment<\/strong>&nbsp;while the third, household consumption, remains almost flat.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Production recorded the sharpest acceleration, rising by&nbsp;<strong>0.8% compared with 0.3% in the previous quarter<\/strong>. Business investment followed at&nbsp;<strong>+0.9%<\/strong>, suggesting companies are becoming more willing to invest and plan ahead.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Together, these indicators point to greater confidence on the supply side of the economy.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">The question is whether demand will follow.<\/p>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>The paradox of an engine running slowly<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">This is the main point of attention in the third-quarter figures.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Household consumption has traditionally been one of the key drivers of French economic growth, yet it increased by only&nbsp;<strong>0.1%<\/strong>.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Growth driven by production and business investment without a corresponding increase in consumption raises a question about sustainability.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Companies are producing and investing in anticipation of future demand but, for the moment, that demand is not increasing at the same pace.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">This also sheds light on another important indicator:&nbsp;<strong>European household savings remain elevated<\/strong>, at around 16% of income in the euro area compared with 12% before the pandemic.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">What households are not spending, they are continuing to save.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">The two indicators therefore tell much the same story from different perspectives:&nbsp;<strong>subdued consumption on one side and persistently high savings on the other.<\/strong><\/p>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>Goods and services are following different paths<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">A closer look at consumer spending adds another layer to the picture.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Consumption of goods remained&nbsp;<strong>flat<\/strong>, neither increasing nor decreasing.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Consumption of services rose by&nbsp;<strong>0.2%<\/strong>, accounting for the slight increase in household spending overall.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">This divergence is consistent with a broader shift in consumer behaviour: households are increasingly making trade-offs in favour of&nbsp;<strong>use, services and experiences rather than ownership<\/strong>.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">The same logic can be seen in the success of leisure attractions and in the resilience of expenditure related to experiences and quality of life.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">For retailers, whose activity remains largely dependent on the sale of physical goods, this gap is an important signal to monitor.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">?&nbsp;<strong><a href=\"https:\/\/observatoirecetelem.com\/en\/mobility-minute\/why-are-theme-parks-so-successful-in-france\" target=\"_blank\" rel=\"noreferrer noopener\">Read also: why are theme parks attracting so many visitors?<\/a><\/strong><\/p>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>What could this mean for the end of the year?<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">The third quarter comes immediately before one of the most important periods of the year for French retailers:&nbsp;<strong>the Christmas and holiday shopping season<\/strong>.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">For many businesses, these weeks account for a significant share of annual sales.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Entering this period with goods consumption flat and overall household consumption increasing by just 0.1% leaves retailers waiting to see whether consumers will start spending again.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Two scenarios are possible.<\/p>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>A year-end rebound<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Households that have kept spending under control throughout the year could use part of their accumulated savings during the holiday season.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Consumer spending would then experience a temporary recovery.<\/p>\n<\/div>\n\n<div class=\"container\">\n<h3 class=\"wp-block-heading\"><strong>Continued caution<\/strong><\/h3>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">The restraint observed during the third quarter could persist into the final months of the year, preventing any significant rebound.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">The difference between these two scenarios will become visible in the fourth-quarter figures.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">They will help determine whether the 0.5% third-quarter growth rate marked the beginning of a broader recovery \u2014 or whether it was primarily a supply-driven episode.<\/p>\n<\/div>\n\n<div class=\"container\">\n<h2 class=\"wp-block-heading\"><strong>Key takeaways<\/strong><\/h2>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">French economic growth reached&nbsp;<strong>0.5% in the third quarter<\/strong>, exceeding economists\u2019 forecast of 0.3%.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">This positive surprise was driven primarily by the production of goods and services, which increased by&nbsp;<strong>0.8% compared with 0.3% in the previous quarter<\/strong>, and by business investment, up&nbsp;<strong>0.9%<\/strong>.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">Household consumption, however, increased by only&nbsp;<strong>0.1%<\/strong>. Spending on goods remained flat, while consumption of services rose by 0.2%.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">With household consumption still subdued ahead of the crucial holiday shopping season, the sustainability of this supply-led growth will be one of the main issues to watch in the months ahead.<\/p>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\">?&nbsp;<strong><a href=\"https:\/\/observatoirecetelem.com\/en\/lobservatoire-cetelem-de-lautomobile\/5-ways-to-bounce-back\" target=\"_blank\" rel=\"noreferrer noopener\">Discover the Cetelem Observatory Automotive 2026 study<\/a><\/strong><br>?&nbsp;<strong><a href=\"https:\/\/personal-finance.bnpparibas\/en\/en-november-2025-motorcycle-market-french-growth\/\" target=\"_blank\" rel=\"noreferrer noopener\">Back to the November 2025 Mobility &amp; Consumption Minute on BNP Paribas Personal Finance<\/a><\/strong><\/p>\n<\/div>\n\n<div class=\"container\">\n<div class=\"wp-block-group has-background is-layout-constrained wp-container-core-group-is-layout-e3964afe wp-block-group-is-layout-constrained\" style=\"border-top-left-radius:28px;border-top-right-radius:28px;border-bottom-left-radius:28px;border-bottom-right-radius:28px;background-color:#dcdcdc;padding-top:var(--wp--preset--spacing--60);padding-right:var(--wp--preset--spacing--60);padding-bottom:var(--wp--preset--spacing--60);padding-left:var(--wp--preset--spacing--60)\">\n<h3 class=\"wp-block-heading\"><strong><strong><strong><strong>FAQ &#8211; French economic growth and household consumption<\/strong><\/strong><\/strong><\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why did French economic growth exceed forecasts in the third quarter?<\/strong><br>Growth reached&nbsp;<strong>0.5%<\/strong>, compared with the 0.3% expected by economists. The increase was mainly driven by production of goods and services, up 0.8%, and business investment, which rose by 0.9%.<\/li>\n\n\n\n<li><strong>Why is household consumption growing so slowly?<\/strong><br>Vehicle replacement is being slowed by the cost of new cars and by motorists delaying purchasing decisions as they consider petrol, diesel, hybrid and electric alternatives.<\/li>\n\n\n\n<li><strong>Does keeping a car for longer reduce its cost?<\/strong><br>Not necessarily. As vehicles age, maintenance expenses can increase because of the cost of spare parts, repairs and labour. Household spending therefore shifts from purchasing the vehicle towards maintaining it.<\/li>\n\n\n\n<li><strong>Which European country has the oldest car fleet?<\/strong><br>Greece has one of Europe\u2019s oldest car fleets, with vehicles more than 17 years old on average, compared with around 12.5 years across Europe.<\/li>\n\n\n\n<li><strong>How many kilometres does the average European car travel each year?<\/strong><br>Around&nbsp;<strong>12,000 kilometres per year<\/strong>, or close to&nbsp;<strong>1,000 kilometres per month<\/strong>, although there are significant differences between countries and vehicle types.<\/li>\n\n\n\n<li><strong>Where can I find the detailed analyses?<\/strong><br>Both full analyses are published on the Observatoire Cetelem website, in the Automotive and Consumption sections.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n\n<div class=\"container\">\n<p class=\"wp-block-paragraph\"><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>INSEE has published its figures for the third quarter, and they came in above expectations:&nbsp;French economic growth reached 0.5%, compared with the 0.3% forecast by economists. But the breakdown reveals an imbalance. Total production of goods and services rose by&nbsp;0.8%, while business investment increased by&nbsp;0.9%. Household consumption, by contrast, grew by just&nbsp;0.1%. In other words, [&hellip;]<\/p>\n","protected":false},"author":1981,"featured_media":35640,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1496],"tags":[],"class_list":["post-35856","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consumption-minute"],"acf":[],"_links":{"self":[{"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/posts\/35856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/users\/1981"}],"replies":[{"embeddable":true,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/comments?post=35856"}],"version-history":[{"count":5,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/posts\/35856\/revisions"}],"predecessor-version":[{"id":35983,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/posts\/35856\/revisions\/35983"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/media\/35640"}],"wp:attachment":[{"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/media?parent=35856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/categories?post=35856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/observatoirecetelem.com\/en\/wp-json\/wp\/v2\/tags?post=35856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}