French architecture in France

France GDP Q2 2018

France: Second estimate confirms stable growth in Q2

A detailed breakdown of economic growth released on 29 August by the Statistical Institute (INSEE) confirmed the preliminary estimate that showed the French economy expanded at a steady pace in the second quarter. GDP rose 0.2% on a seasonally-adjusted quarter-on-quarter basis, unchanged from the first quarter’s reading. In annual terms, growth in the second quarter slowed to 1.7% from 2.2% observed in the first quarter.

Subdued growth in the second quarter largely reflected weak domestic demand. Private consumption faltered in Q2 and was down 0.1% in quarter-on-quarter terms (Q1: +0.2% quarter-on-quarter s.a.). The slump came on the back of weaker demand for food products; lower energy expenditures due to weather factors; and a marked downturn in transport expenses amid public transport strikes, particularly by rail workers. On the flip side, fixed investment growth accelerated notably to 0.8% in Q2 (previously reported: 0.7% qoq s.a.) from 0.2% in Q1 (previously reported: 0.7% qoq s.a.), thanks to solid business investment growth more than offsetting a marginal fall in household investment. Lastly, government consumption accelerated marginally in Q2, expanding 0.3% (previously reported: 0.4% qoq s.a) in the quarter, above Q1’s 0.1% (previously reported: +0.2% qoq s.a.) increase.

Meanwhile, the external sector took a bite out of growth in Q2, as imports rebounded sharply, swinging from a 0.4% contraction in Q1 (previously reported: -0.3% qoq s.a.) to a 1.0% expansion in Q2 (previously reported: +1.7% qoq s.a.). The recovery of imports outpaced that of exports: Exports swung from a 0.4% dip in Q1 to a 0.2% increase in Q2 (previously reported: 0.6% qoq s.a.). As a result, the external sector subtracted 0.3 percentage points from overall growth in the second quarter (Q1 net contribution: 0.0 percentage points).

Growth should pick up in the second half of the year as fixed investment continues expanding at a robust pace and household spending benefits from rising employment, which is also likely to get a boost from recent income tax cuts. However, uncertainty over global trade policies continues to weigh on the outlook.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest