French Economy Contracts 0.2% QoQ in Q1


In Q1 of 2013, as in the previous quarter, French gross domestic product in volume shrank 0.2 percent, dragged down by weak business investment and exports, confirming an earlier estimate. Some components were marginally revised but revisions offset each other.

Household consumption expenditure was almost stable (-0.1 percent after +0.1 percent in Q4 of 2012) while gross fixed capital formation dropped again (-1.0 percent after -0.8 percent). Overall, total domestic expenditure weighed down on GDP growth: -0.2 points after 0.0 points.

Imports increased slightly (+0.2 percent after -1.0 percent), while exports decreased further (-0.4 percent after -0.7 percent). Hence, foreign trade contributed negatively to GDP growth (-0.2 points after +0.1 points). Changes in inventories contributed slightly to GDP growth in Q1 2013: +0.2 points after -0.2 points in Q4 2012.

In Q1 2013, households’ disposable income upturned: in nominal terms it increased by 1.3 percent after a step back in Q4 2012 (-0.7 percent). Taxes on income and wealth markedly decreased (-4.9 percent), following a strong growth in the second half of 2012 (+4.1 percent in Q3 and +7.4 percent in Q4). This was mainly due to measures increasing the income tax in 2012, and to the exceptional contribution for solidarity tax on wealth at year-end.

Wages received by households accelerated slightly in Q1 (+0.4 percent after +0.2 percent) while social benefits in cash rose almost at the same rate as in the previous quarter (+0.7 percent after +0.8 percent).

French Economy Contracts 0.2% QoQ in Q1


INSEE | Nuno Fontes | nuno@tradingeconomics.com
6/26/2013 1:43:56 PM