French Q2 GDP Growth Confirmed at 0.2%


The French economy grew 0.2 percent on quarter in the three months to June of 2018, the same pace as in the previous period and in line with the preliminary reading, the second estimate showed. The pace of expansion remained at the weakest level since the third quarter of 2016 mainly due to a drop in consumer spending and a negative contribution from external trade, while fixed investment rose firmly.

Final domestic demand added 0.2 percentage points to GDP growth, namely gross fixed capital formation (0.2 percentage points) and government spending (0.1 percentage points), while household consumption subtracted 0.1 percentage points. Also, changes in inventories added 0.2 percentage points (vs 0.3 percentage points initially estimated), while net foreign demand subtracted 0.3 percentage points.

Within domestic demand, fixed investment increased by 0.8 percent, much faster than a 0.2 percent rise in the previous quarter, mainly due to a pick-up in corporate investment (1.3 percent vs 0.1 percent in Q1). Also, government expenditure went up 0.3 percent, compared to a 0.1 percent gain in the first quarter. By contrast, household spending contracted by 0.1 percent, following a 0.2 percent advance in the previous three-month period. It was the first quarterly drop in private spending since the third quarter of 2016, as consumption of goods continued to decline (-0.3 percent vs -0.1 percent) and that of services slowed (0.1 percent vs 0.5 percent). In particular, consumption of food products fell sharply (-1.3 percent vs -0.3 percent), as well as expenditures on energy (-1.9 percent vs 0.8 percent) due to temperatures higher than the seasonal norms in April. In services, the slowdown was notably driven by the downturn in transport expenses (-2.7 percent vs 1.1 percent), mainly in rail transport as a result of strikes.

Imports jumped 1 percent (vs -0.4 percent in Q1) while exports grew at a softer 0.2 percent (vs -0.4 percent in Q1).

Year-on-year, the economy expanded 1.7 percent in the second quarter, following a marginally revised 2.1 percent growth in the previous period. 

French Q2 GDP Growth Confirmed at 0.2%


Insee | Rida | rida@tradingeconomics.com
8/29/2018 8:38:53 AM