Thursday, May 15, 2008

National Accounts

GDP is up 2.1 percent (2.2 in raw data uncorrected for number of working days), revised upward from the previous 1.9. Christine Lagarde is ecstatic, because the figure is now above the lower bound of her predicted bracket (2.0-2.5). But not so fast: the actual INSEE figures show that an amount equal to 0.1 pct of GDP went into inventories, not consumption. There are some other "perverse" revelations in the data. Part of the consumption increase went to a spike in automobile sales at the end of last year (+4.4%), as customers snapped up large sedans in advance of the penalty to be imposed under the Environmental Grenelle accord on high-consumption vehicles. And export growth has slowed.

Meanwhile, the figures continue to show an increase in purchasing power (+3.3%). Rents are up 7.2%, however, and food costs are also up (1.3%). Yet discretionary household income is said to be up 5%. Could there be some inconsistency in the numbers?

The public deficit was 2.7%, under the SGP limit of 3, but public debt is 63.9% of GDP, above the limit of 60.

On the whole, not a bad performance given the poor conjuncture. Various commentaries.


It might not have seemed possible for a political party to appear more dysfunctional than the PS, but the UMP is giving the Socialists a run for their money. The Foreign Affairs Committee yesterday rejected the bill on proposed institutional reform, prompting Hervé de Charette to denounce the "Brezhnevian" leadership of the UMP (now there's an adjective that hasn't been heard for a while!), while Christian Estrosi said that there was a "real problem of organization." Claude Goasguen was blunter still: he denounced the "connards" who "shoot off their mouths from across the Seine" (Sarko's counselors, in other words).

Charette thinks there should be "courants" inside the party. Yes, of course, they've worked such wonders for the PS. I find the use of the word courant interesting. "Factions" being anathema in Jacobin France, one has courants, which are supposed to flow tranquilly into one great stream. But the metaphor is a tricky one: currents divide as well as unite, and sometimes they cause sparks to fly.