Consumption in France

France Consumption | Economic News & Forecasts

France - Consumption

Second estimate confirms stable growth in Q2

A detailed breakdown of economic growth released on 29 August by the Statistical Institute (INSEE) confirmed the preliminary estimate that showed the French economy expanded at a steady pace in the second quarter. GDP rose 0.2% on a seasonally-adjusted quarter-on-quarter basis, unchanged from the first quarter’s reading. In annual terms, growth in the second quarter slowed to 1.7% from 2.2% observed in the first quarter.

Subdued growth in the second quarter largely reflected weak domestic demand. Private consumption faltered in Q2 and was down 0.1% in quarter-on-quarter terms (Q1: +0.2% quarter-on-quarter s.a.). The slump came on the back of weaker demand for food products; lower energy expenditures due to weather factors; and a marked downturn in transport expenses amid public transport strikes, particularly by rail workers. On the flip side, fixed investment growth accelerated notably to 0.8% in Q2 (previously reported: 0.7% qoq s.a.) from 0.2% in Q1 (previously reported: 0.7% qoq s.a.), thanks to solid business investment growth more than offsetting a marginal fall in household investment. Lastly, government consumption accelerated marginally in Q2, expanding 0.3% (previously reported: 0.4% qoq s.a) in the quarter, above Q1’s 0.1% (previously reported: +0.2% qoq s.a.) increase.

Meanwhile, the external sector took a bite out of growth in Q2, as imports rebounded sharply, swinging from a 0.4% contraction in Q1 (previously reported: -0.3% qoq s.a.) to a 1.0% expansion in Q2 (previously reported: +1.7% qoq s.a.). The recovery of imports outpaced that of exports: Exports swung from a 0.4% dip in Q1 to a 0.2% increase in Q2 (previously reported: 0.6% qoq s.a.). As a result, the external sector subtracted 0.3 percentage points from overall growth in the second quarter (Q1 net contribution: 0.0 percentage points).

Growth should pick up in the second half of the year as fixed investment continues expanding at a robust pace and household spending benefits from rising employment, which is also likely to get a boost from recent income tax cuts. However, uncertainty over global trade policies continues to weigh on the outlook.

Met the why particular Consensus Forecast panelists expect the economy to grow 1.8% in 2018, which is down 0.1 percentage points from last month's forecast. For 2019, panelists forecast 1.8% growth.

France - Consumption Data

2013  2014  2015  2016  2017  
Consumption (annual variation in %)0.6  0.8  1.4  1.9  1.2  

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France Facts

ValueChangeDate
Bond Yield0.790.46 %Nov 09
Exchange Rate1.140.65 %Nov 09
Stock Market5,117-0.29 %Nov 09

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