France GDP Q1 2016


France: Q1 GDP growth revised upward; domestic demand drives fastest growth in one-year

May 30, 2016

The French economy picked up steam in the first quarter of this year underpinned by buoyant private consumption and investment. According to more complete data released by the Statistical Office (INSEE) on 30 May, growth in the first quarter was revised upward from the 0.5% initially reported to 0.6% over the previous quarter in seasonally-adjusted terms. Q1’s print marked a one-year high and followed Q4’s revised 0.4% increase (previously reported: +0.3% quarter-on-quarter). On a year-on-year basis, the economy expanded 1.4% in Q1, matching the print tallied in the previous quarter (previously reported: +1.3% year-on-year). Q1’s reading bodes well for President François Hollande. The beleaguered president is facing the biggest strikes in over two decades and the figures from the first quarter puts the economy on track to reach the 1.5% growth objective outlined by the government. In addition, the result is in line with his discourse that the recovery is picking up momentum.

The first quarter reading was mainly the result of solid domestic demand, which offset a negative contribution of the external sector. Private consumption expanded a robust 1.0% in Q1 (previously reported: +1.2% qoq), which came in above the flat reading tallied in Q4. An environment of low oil prices, recovering disposable income and low interest rates have propelled private consumption to its best reading since Q1 2006. Fixed investment growth jumped from 1.2% in the fourth quarter to a solid 1.6% expansion in the first quarter (previously reported: +0.9% qoq). Fixed investment benefited from a surge in business investment, which is being encouraged by tax breaks. Government consumption expanded a soft 0.4% in Q1 (Q4: +0.4% qoq).

The external sector continued to be a drag on the economy in the first quarter of the year. Exports tallied flat growth (Q4: +0.8% qoq) as demand for French transport equipment dropped sharply in the January to March period (previously reported: -0.2% qoq). Imports growth decelerated from 2.5% in Q4 to a tepid 0.6% in Q1 (previously reported: +0.5% qoq) as oil purchases declined sharply. As imports decelerated at a sharper pace than exports, the contribution of the external sector improved from minus 0.6 percentage points in the fourth quarter of last year to minus 0.2 percentage points in the first quarter of this year.

French growth prospects are improving, yet growing protests over labor reforms pose a downside risk. Ongoing protests have the potential to impact economic activity in the upcoming quarters. Despite the strikes, the economy is expected to remain on a stable footing. Consumers and businesses remain upbeat. In May, consumer confidence reached an over-nine-year high while the business confidence index remained stable at a seven-month high. In addition, low interest rates along with subdued inflation and positive figures from the labor market are expected to provide an important boost to fixed investment and private consumption.

The government expects economic growth of 1.5% in 2016 and 2017. FocusEconomics Consensus Forecast panelists expect the economy to grow 1.3% in 2016, which is unchanged from last month's forecast. For 2017, panelists forecast economic growth at 1.5%.

Author: Jean-Philippe Pourcelot, Economist

Sample Report

Looking for forecasts related to GDP in France? Download a sample report now.


France GDP Chart

France GDP Q1 2016 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.

France Economic News

  • France: Business confidence reaches six-month high in May

    May 23, 2019

    In May, the National Institute of Statistics and Economic Studies’ (INSEE) business-climate indicator for the manufacturing sector climbed 4 points from a month earlier to land at 104 points—a six-month high.

    Read more

  • France: Private-sector activity growth hits six-month high in May

    May 23, 2019

    The seasonally-adjusted IHS Markit Flash Composite Purchasing Managers’ Index (PMI) jumped to 51.3 points in May, climbing from 50.1 points in April and signaling the fastest private-sector activity growth in six months. May’s upturn reflected stronger services-sector activity once again offset by a fall in manufacturing output—although the pace of losses slowed somewhat from April.

    Read more

  • France: Inflation edges up in April

    May 15, 2019

    On 15 May, the Statistical Institute (INSEE) reported that consumer prices rose 0.3% from a month earlier in April (March: +0.8% month-on-month).

    Read more

  • France: Industrial output falls in March

    May 10, 2019

    Industrial output contracted 0.9% month-on-month and in seasonally-adjusted terms in March, on the heels of a revised 0.1% month-on-month expansion in February (previously reported: +0.4% month-on-month s.a.).

    Read more

  • France: Growth steady through Q1

    April 30, 2019

    France’s economy grew 0.3% quarter-on-quarter and in seasonally-adjusted terms in the first quarter, according to a first estimate released by the Statistical Institute (INSEE).

    Read more

More news

Search form