France: Flat second quarter confirmed
September 28, 2011
According to the second quarter's revised data released on 28 September, GDP was unchanged over the previous quarter, which confirmed the first estimate released on 12 August. The reading contrasted the 0.9% expansion recorded in the first quarter. On an annual basis, the economy expanded 1.7% in the second quarter, down from the 2.2% annual rise recorded in the previous quarter. GDP moderated in the second quarter mainly on the back of deteriorating domestic demand. Private consumption contracted 0.7% over the previous period (Q1: +0.4% quarter-on-quarter), while gross fixed investment rose 0.6%, half the 1.2% expansion observed in the previous quarter. Meanwhile, the contribution of inventory changes dropped from plus 0.8 percentage points in the first quarter to zero. In contrast, the net contribution of the external sector to overall growth swung from minus 0.5 percentage points in the first quarter to plus 0.3 percentage points in Q2, as imports deteriorated more markedly than exports. INSEE expects the economy to expand 2.1% this year, according to its quarterly economic outlook from June. However, the government forecasts the economy to expand 1.75% this year and grow at the same rate in 2012.