France: Economic growth remains steady in Q4
February 15, 2011
In the fourth quarter, GDP increased a seasonally adjusted 0.3% over the previous quarter, according to the first estimate released by the National Institute of Statistics and Economic Studies (INSEE, Institut National de la Statistique et des etudes economiques). The reading matched the 0.3% increase recorded in the third quarter but was slightly below last month's FocusEconomics Consensus Forecast, which had the economy expanding 0.4%. On an annual basis, the economy expanded 1.5% in the fourth quarter, down from the 1.7% annual rise recorded in the previous quarter. For the full year 2010, GDP expanded 1.5% after the 2.5% contraction in 2009, the sharpest drop since World War II. The fourth quarter expansion was driven by an improvement in household consumption and a stronger external sector which offset a negative contribution from inventories. Private consumption rose 0.9% over the previous period (Q3: +0.5% quarter-on-quarter), while gross fixed investment rose 0.4%, an inch below the 0.5% expansion in the third quarter. In addition, the net contribution of the external sector to overall growth rebounded from minus 0.4 percentage points in the third quarter to plus 0.5 percentage points in the fourth, as exports of goods and services rose 0.8% while imports contracted 1.2%. In contrast, the contribution of inventory changes swung from plus 0.2 percentage points in the third quarter to minus 0.8 percentage points. At a sector level, the fourth quarter reading reflected slower growth in services and industry, while agriculture remained flat. INSEE expects the economy to expand 1.3% this year, according to its quarterly economic outlook from December. French Economy Minister Christine Lagarde maintained the government's 2011 economic growth target of 2.0%.