French Economy Expands 0.5% in Q3


The French economy advanced 0.5 percent on quarter in the three months to September of 2017, following an upwardly revised 0.6 percent expansion in the second quarter and in line with market expectations, the preliminary estimate showed. It was the fifth straight quarter of growth, as household consumption and fixed investment grew firmly, and inventory changes contributed positively. Meanwhile, foreign trade was a drag on growth, as exports rose at softer pace and imports jumped.

From the expenditure side, the positive contribution to GDP came from changes in inventories (0.5 percentage points), household consumption (0.3 percentage points), gross fixed capital formation (0.2 percentage points) and government spending (0.1 percentage points); while net trade subtracted 0.6 percentage points to growth.

Household consumption increased by 0.5 percent, faster than a 0.3 percent rise in the prior three-month period, and government expenditure went up by 0.4 percent, the same as in Q2. Meanwhile, fixed investment rose at a slower 0.8 percent after a 1 percent gain in in the previous quarter, as spending eased on both construction (0.5 percent from 1.2 percent) and market services (1 percent from 1.2 percent), while investment on manufactured goods went up faster (0.8 percent from 0.5 percent).

Imports jumped 2.5 percent after a 0.2 percent rise in the previous period while exports grew at a softer 0.7 percent, following a 2.3 percent increase in Q2.

From the production side, production in goods and services slightly decelerated in Q3 2017 (0.6 percent from 0.8 percent), as services output rose at softer pace (0.6 percent from 0.8 percent), while goods production grew faster (0.8 percent from 0.7 percent). In detail, output in manufactured goods kept on rising (0.6 percent from 0.7 percent), mainly because of transport equipment (3.1 percent after showing no growth in Q2), while production slowed sharply in construction (0.3 percent from 1.2 percent).

Year-on-year, the economy expanded by 2.2 percent, following a 1.8 percent growth in the previous period. It was the strongest pace of expansion since the second quarter of 2011.

Insee l Rida Husna | rida@tradingeconomics.com
10/31/2017 9:33:36 AM