The economy continued to expand but at minimal pace at year-end. Quarterly growth weighed in at just 0.1 percent, a tick above the market consensus but down from the previous period's unrevised 0.2 percent and its weakest performance in 2022. Annual growth halved to 0.5 percent and total output was just 1.2 percent above its pre-crisis level at the end of 2019.

The quarterly gain masked a contraction in final domestic demand which subtracted 0.2 percentage points. Household spending was particularly soft, falling 0.9 percent after a 0.5 percent gain in the third quarter. However, gross fixed capital formation rose 0.8 percent, building on a 3.8 percent bounce previously and boosted by a 1.2 percent jump in business investment. That said, housing investment (minus 0.2 percent after minus 0.7 percent) declined for a third straight quarter. General government consumption was up 0.2 percent while business inventories reduced growth by 0.2 percentage points.

Consequently, the economy would have been much weaker but for the external sector which added 0.5 percentage points having subtracted fully 1.0 percentage point in the third quarter. However, the improvement here simply reflected a smaller fall in exports (0.3 percent) than in imports (1.9 percent).

In sum, the economy continues to struggle in the face of the war in Ukraine. High inflation is clearly hitting consumer spending, the housing market is suffering from higher borrowing costs and strike activity will also hinder output this quarter. The economy will do well just to keep its head above water. Even so, for now, with the both the French ECDI and ECDI-P at exactly zero, overall economic activity is performing in line with market expectations.

Fourth-quarter GDP in France is expected to hold unchanged on a quarterly basis.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. The flash estimate, released a relatively short 4-5 weeks after the end of the reference quarter, is an effort to speed up delivery of key economic data. In contrast to most European flash releases, the French version provides an early look at the GDP expenditure components.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anaemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.