France: Growth sustains its momentum amid upbeat household spending in Q3
October 30, 2019
The economy grew a seasonally-adjusted 0.3% quarter-on-quarter in the third quarter, landing on Consensus and matching the expansions recorded in the previous two quarters according to a first estimate released by the French Statistical Institute (INSEE) on 30 October. However, on an annual basis, growth inched down from the previous quarter (Q3: +1.3% year-on-year; Q2: +1.4% yoy).
Household spending accelerated (Q3: +0.3% quarter-on-quarter seasonally-adjusted; Q2: +0.2% qoq s.a.) amid a sharp pick-up in consumer sentiment, an over one-decade low unemployment rate and subdued inflation, while government spending sustained its momentum (Q3: +0.4% qoq s.a.; Q2: +0.4% qoq s.a.). On the flipside, household investment nearly stagnated despite low interest rates, although business investment edged up. Consequently, overall fixed investment growth slowed to 0.9% on a quarter-on-quarter, seasonally-adjusted basis (Q2: +1.2% qoq s.a.).
Exports returned to growth in the third quarter (Q3: +0.3% qoq s.a.; Q2: -0.1% qoq s.a.), despite the industrial pullback across the Eurozone. Similarly, imports rebounded markedly (Q3: +1.4% qoq s.a.; Q2: -0.3% qoq s.a.). Taken together, the external sector subtracted 0.4 percentage points from the overall expansion, following a neutral contribution in Q2.
Author: Nicolás J. Aguilar, Economist