French Q3 GDP Growth Strongest in Almost a Year

The French economy advanced 0.4 percent on quarter in the three months to September 2018, following a 0.2 percent growth in the previous period and missing market expectations of a 0.5 percent expansion, the first estimate showed. Still, it was the strongest growth rate since the last quarter of 2017, due to a rebound in household spending and increases in both fixed investment and exports.

Final domestic demand added 0.5 percentage points to the GDP growth in the third quarter, in particular household consumption (0.3 percentage points); gross fixed capital forrmation (0.2 percentage points). Also, net foreign demand contributed positively to the GDP growth (0.1 percentage points), while changes in inventories substracted 0.2 percentage points.

Within domestic demand, household consumption grew by 0.5 percent in the three months to September, rebounding from a 0.1 percent contraction in the second quarter. It was the steepest increase in private spending in a year as consumption of goods bounced back significantly (0.6 percent vs -0.4 percent in Q2) and that of services accelerated slightly (0.3 percent vs 0.1 percent). In particular, expenditures on energy recovered slightly (0.4 percent vs -2.2 percent) and consumption of food products stablised after two quarters of decline (0.1 percent vs -1.3 percent). In services, transport expenses bounced back markedly (3.7 percent after -2.9 percent) after a significant decline in Q2 due to strikes in rail transport. In addition, fixed investment increased by 0.8 percent, following a 0.9 percent rise in the previous quarter, on the back of corporate investment (1.4 percent vs 1.3 percent), notably investment in IT activities and information services, as well as in automotive. Also, government expenditure went up 0.2 percent, the same pace as in the prior quarter. 

Exports surged 0.7 percent (vs 0.1 percent in Q2), while imports rose at a softer 0.3 percent (vs 0.7 percent in Q2).

Year-on-year, the economy expanded 1.5 percent in the third quarter, easing from a 1.7 percent growth in the previous three-month period.

French Q3 GDP Growth Strongest in Almost a Year

INSEE | Rida |
10/30/2018 9:23:47 AM