French Q2 GDP Growth Confirmed at 0.2%



The French economy advanced 0.2 percent on quarter in the three months to June 2018, the same pace as in the previous period and in line with the second estimate. The pace of expansion remained at the weakest level since the third quarter of 2016 as household spending contracted for the first time in seven quarters and net external demand contributed negatively to the GDP growth.

Final domestic demand added 0.2 percentage points to the GDP growth, in particular gross fixed capital formation (0.2 percentage points). Also, changes in inventories added 0.2 percentage points, while net foreign demand subtracted 0.2 percentage points (vs -0.3 percentage points previously estimated).

Within domestic demand, fixed investment increased by 0.8 percent, much faster than a 0.1 percent rise in the previous quarter, mainly due to a pick-up in corporate investment (1.2 percent vs 0.1 percent in Q1). Also, government expenditure went up 0.2 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 and that of services slowed. In particular, consumption of food products fell sharply (-1.3 percent vs -0.3 percent), as well as expenditures on energy (-1.8 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, mainly in rail transport as a result of strikes.

Imports surged 0.7 percent (vs -0.6 percent in Q1) and exports edged up 0.1 percent (vs -0.4 percent in Q1).

Year-on-year, the economy expanded 1.7 percent in the second quarter, in line with second estimates and following a marginally revised 2.2 percent growth in the previous period.

French Q2 GDP Growth Confirmed at 0.2%


INSEE | Rida | rida@tradingeconomics.com
9/21/2018 9:18:34 AM