France: Activity rebounds in Q2
According to a preliminary estimate, economic activity rebounded in the second quarter, increasing 0.5% on a seasonally-adjusted quarter-on-quarter basis, above the 0.2% contraction seen in the first quarter.
Private consumption fell at a milder rate of 0.2% on a seasonally-adjusted quarter-on-quarter basis in Q2 compared to a 1.2% contraction in Q1. Government spending dropped at the sharpest pace since Q4 2021, contracting 0.2% (Q1: 0.0% s.a. qoq). Meanwhile, fixed investment growth was unchanged from the previous quarter at 0.5% in Q2.
Exports of goods and services growth softened to 0.8% in Q2 (Q1: +1.6% s.a. qoq). In addition, imports of goods and services deteriorated, contracting 0.6% in Q2 (Q1: +1.2% s.a. qoq).
On an annual basis, economic growth slowed notably to 4.2% in Q2, following the previous quarter’s 4.8% expansion.
Regarding the risks to the outlook ahead, analysts at the EIU remarked:
“The main risk to our current forecast is a complete and prolonged cut-off of Russian gas supplies to major European markets […]. More disruptions are likely, further damaging the economic outlook and prompting periodic spikes in gas prices. We forecast that annual growth will slow to 1.3% in 2023 even as quarterly growth picks up, and average 1.7% in 202426, just below the euro zone average.”