Domestic Demand in France
France - Domestic Demand
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 - Domestic Demand Data
|Domestic Demand (annual variation in %)||0.5||0.8||1.2||2.0||2.0|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.79||0.46 %||Nov 09|
|Exchange Rate||1.14||0.65 %||Nov 09|
|Stock Market||5,117||-0.29 %||Nov 09|
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September 26, 2018
In September, the consumer confidence indicator published by the National Institute of Statistics and Economic Studies (INSEE) fell 2 points, landing at a 29-month low of 94 points.
September 26, 2018
In September, the National Institute of Statistics and Economic Studies’ (INSEE) business sentiment index for the manufacturing sector ticked down to 117 points from 111 points a month earlier.
September 13, 2018
On 13 September, the Statistical Institute (INSEE) confirmed earlier estimates that consumer prices rose 0.5% from a month earlier, contrasting the 0.1% month-on-month contraction observed in July.
September 7, 2018
In seasonally-adjusted terms, industrial output rose 0.7% month-on-month in July, in line with June’s reading.
September 5, 2018
In August, the seasonally-adjusted IHS Markit Composite Purchasing Managers’ Index (PMI) rose to 54.9 from 54.4 a month earlier, signaling another solid expansion of business activity across the private sector.