France: Economic growth stalls in the first quarter
May 15, 2012
In the first quarter, GDP was flat over the previous quarter, according to a preliminary estimate released on 15 May. The reading followed the revised 0.1% increase recorded in the fourth quarter (previously reported: +0.2% quarter-on-quarter), and matched market expectations. On an annual basis, the economy expanded 0.3% in Q1, down from the 1.2% annual rise recorded in the previous quarter. The first quarter reading reflected how a slight improvement in the domestic sector, on the back of stronger total consumption, was entirely offset by a negative contribution from the external sector. Private consumption rose 0.2% over the previous period (Q4 2011: +0.1% qoq) while government consumption expanded a stronger 0.5% (Q4 2011: +0.2% qoq). In contrast, gross fixed investment fell 0.8% (Q4 2011: +1.3% qoq). The contribution of inventory changes, however, swung from a full percentage-point detraction in Q4 2011 to a 0.1 percentage-point contribution in the first quarter. In contrast, the net contribution from the external sector to overall growth swung from a 0.7 percentage-point contribution in the fourth quarter to a 0.1 percentage-point detraction in the first, as imports outpaced exports. Exports of goods and services rose 0.3%, well below the 1.1% increase recorded in Q4, while imports rebounded to a 0.7% expansion (Q4 2011: -1.4% qoq). The government expects the economy to expand 0.5% this year and 1.7% in 2013.