France: Growth sustains its momentum amid upbeat household spending in Q3
November 29, 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 second estimate released by the French Statistical Institute (INSEE) on 29 November. 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 to a revised 0.4% from the previous quarter (previously reported: +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: +0.5% qoq s.a.; Q2: +0.5% qoq s.a.). On the flipside, household investment slowed despite low interest rates, although business investment edged up. Consequently, overall fixed investment growth edged down to 1.2% (Q2: +1.3% qoq s.a.).
Meanwhile, exports contracted a revised 0.1% in the third quarter (previously reported: +0.3% qoq s.a.; Q2: -0.2% qoq s.a.), amid the industrial pullback across the Eurozone. Conversely, imports rebounded (Q3: +0.7% qoq s.a.; Q2: -0.3% qoq s.a.). Taken together, the external sector subtracted a revised 0.2 percentage points from the overall expansion (previously reported: minus 0.4 percentage points), following a neutral contribution in Q2.