French Q2 GDP Growth Slows Unexpectedly to 0.2%

The French economy advanced 0.2 percent on quarter in the three months to June 2019, easing from a 0.3 percent growth in the previous period and missing market expectations of a 0.3 percent expansion, a preliminary estimate showed. This was the weakest growth rate in a year, as household consumption rose at a softer pace while changes in inventories contributed negatively to GDP growth and net foreign demand was neutral.

Within domestic demand, household consumption growth eased to 0.2 percent from 0.4 percent in Q1, as consumption of goods was flat (vs 0.1 percent in Q1) and consumption of services decelerated (0.3 percent vs 0.6 percent) due to a slowdown in expenditure on accommodation and food services. Regarding goods, the decline in the expenditures on engineered goods (-0.3 percent vs 0.7 percent) was linked to the fall in car purchases, while expenditures on energy increased further (0.8 percent vs 0.9 percent) driven by some below average temperatures in May after a mild winter. Finally, expenditures on food fell at a slower pace (-0.2 percent vs -1.1 percent). Meantime, fixed investment advanced faster (0.9 percent vs 0.5 percent), boosted by corporate investment (1.2 percent vs 0.7 percent) and a rebound in information-communication and business services. Conversely, household investment barely increased (0.1 percent, the same pace as in Q1). Government spending also increased at a faster rate (0.4 percent vs 0.1 percent).

Exports expanded 0.2 percent, the same pace as in Q1; while imports grew at a slower 0.1 percent, compared to 1.1 percent in Q1.

Year-on-year, the economy expanded 1.3 percent in the second quarter, little-changed from a 1.2 percent growth in the previous three-month period.

French Q2 GDP Growth Slows Unexpectedly to 0.2%

INSEE | Rida Husna |
7/30/2019 9:47:01 AM