France: Economy rebounds stronger than expected in Q3
November 14, 2014
In the third quarter, GDP expanded a seasonally-adjusted 0.3% over the previous quarter, according to a flash estimate released by the Statistical Institute (INSEE) on 14 November. The reading, which overshot the 0.1% rise the markets had expected, marked a notable improvement over the revised 0.1% contraction observed in Q2 (previously reported: 0.0% quarter-on-quarter). Over the same period last year, GDP growth accelerated from a flat reading in Q2 to 0.4% in Q3.
Q3’s result stemmed from an improvement in domestic demand, which was partially compensated by a deterioration in the external sector. Although growth in private consumption decelerated slightly in the third quarter (Q3: +0.2% qoq; Q2: +0.3 qoq), government spending increased notably over the previous quarter (Q3: +0.8% qoq; Q2: +0.5 qoq). Fixed investment continued to contract in Q3, albeit a slower pace.
The external sector’s net contribution to overall growth fell from minus 0.1 percentage points in Q2 to minus 0.2 percentage points in Q3, as growth in imports of goods and services outpaced that of exports. Imports rose from a 0.3% increase in Q2 to 1.1% expansion in Q3. Exports increased 0.5% over the previous quarter, which contrasted the 0.1% contraction tallied in Q2.