France: Revised data confirms recession
June 26, 2013
Detailed figures released on 26 June confirmed the 0.2% contraction over the previous three-month period in the first quarter of the year. The decline followed the 0.2% drop seen in Q4, thus the economy entered into a technical recession following two consecutive quarters of declining GDP.
The first quarter reading reflected a deterioration in both the domestic and the external side of the economy. Private consumption fell 0.1% over the previous period (Q4 2012: 0.1% quarter-on-quarter), whereas government consumption expanded 0.4% (Q4: +0.3% qoq). Meanwhile, gross fixed investment contracted a sharper 1.0%, which followed the 0.8% decline seen in Q4. On a positive note, changes in inventories added 0.2 percentage points to overall economic growth.
Meanwhile, the net contribution from the external sector to overall growth swung from a 0.1 percentage-point contribution in the fourth quarter to a 0.2 percentage-point detraction in the first amid an increase in imports. Exports of goods and services decreased 0.4% in Q1 (Q4: -0.7% qoq), while imports rose 0.2% (Q4: -1.0% qoq).
The government expects the economy to expand 0.1% in 2013. FocusEconomics Consensus Forecast panellists see the economy contracting 0.2% this year, which is unchanged from last month's forecast. For 2014,panellists anticipate the economy will grow 0.8%.