France: GDP grows at the fastest rate in almost two years in Q1
May 13, 2015
According to preliminary data released by the statistical office (INSEE), the French economy accelerated in the first quarter of 2015. In Q1, GDP increased a seasonally-adjusted 0.6% over the previous quarter, which came in above the flat growth seen in Q4 2014. The reading was the highest since Q2 2013 and overshot market expectations of 0.4% growth. Year-on-year, GDP accelerated from a flat growth in Q4 2014 to a 0.7% expansion in Q1 2015.
The first quarter’s acceleration was the result of faster growth in domestic demand. Private consumption grew 0.8% in Q1 2015, thus exceeding the 0.2% rise recorded in Q4. Government spending increased 0.4% in Q1 2015, which was a tad below the 0.5% expansion in Q4 2014. Meanwhile, gross fixed investment continued to contract in Q1 2015, albeit at a slower pace than in Q4 of last year (Q1 2015: -0.2% quarter-on-quarter; Q4 2014: -0.4% qoq).
On a negative note, the external sector swung to a negative contribution as exports of goods and services decelerated to a 0.9% rise over the previous quarter (Q4 2014: +2.5% qoq), while imports increased 2.3% (Q4 2014: +1.5% qoq). As a result, the external sector’s net contribution to overall economic growth swung from 0.2 percentage points in Q4 2014 to minus 0.4 percentage points in Q1 2015.
Author: Eric Denis , Economist