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France: Fresh data confirm that GDP stalled in Q2

September 23, 2014

GDP growth was flat over the previous quarter in Q2 in seasonally-adjusted terms, according to data released by the Statistical Institute (INSEE) on 23 September. The print, which matched the result tallied in the previous quarter, was in line with a preliminary estimate released on 14 August. On an annual basis, GDP expanded a meagre 0.1% in Q2, which was down from the 0.8% increase observed in Q1 and marked the lowest growth since Q1 2013.

The stagnation recorded in Q2 reflected that better dynamics in domestic demand were offset by a deterioration in the external sector. Private consumption rebounded to a 0.4% increase (Q1: -0.5% quarter-on-quarter) and reached the fastest expansion since Q1 2012. The pace of expansion in government spending was stable at Q1’s 0.4%, while fixed investment plummeted at the fastest pace since Q2 2009, falling 1.1% in Q2 (Q1: -0.9% qoq).

Exports of goods and services expanded 0.1% in Q2 (Q1: +0.6% qoq), while imports rose 0.4% (Q1: +0.8% qoq). The external sector’s net contribution to overall growth fell from a flat reading in Q1 to minus 0.1 percentage points in Q2.

The government lowered its growth projections from 0.7% to 0.4% in 2014, and from 1.7% to 1.0% in 2015. FocusEconomics Consensus Forecast panelists expect the economy to grow 0.7% in 2014, which is unchanged from last month's forecast. For 2015, panelists see economic growth at 1.3%.


Author: Ricard Torné, Lead Economist

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France GDP Q2 2014 0

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: National Institute of Statistics and Economic Studies (INSEE) and FocusEconomics Consensus Forecast.


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