France: Economic growth decelerates in last quarter of 2011
February 15, 2012
In the fourth quarter, GDP increased a seasonally adjusted 0.2% over the previous quarter, according to a preliminary estimate released on 15 February. The reading was below the 0.3% increase recorded in the third quarter but defied market expectations of a 0.1% drop. On an annual basis, the economy expanded 1.4% in the fourth quarter, down from the 1.5% annual rise recorded in the previous quarter. For the full year 2011, GDP expanded 1.7%, faster than the 1.4% increase observed in 2010. The fourth quarter expansion was driven by an improvement in the external sector, which was nearly offset by a negative contribution from inventories. The net contribution from the external sector to overall growth rose from 0.1 percentage points in the third quarter to 0.7 percentage points in the fourth, as exports outpaced imports. Exports of goods and services rose 1.2%, unchanged from the previous quarter, while imports contracted 1.2% (Q3: +0.7% quarter-on-quarter). Meanwhile, private consumption rose 0.2% over the previous period (Q3 2011: +0.3% qoq), while gross fixed investment rose 0.9% (Q3 2011: +0.2% qoq). That said, the contribution of inventory changes swung from zero in the third quarter to minus 0.8 percentage points. The government recently cut its GDP growth forecast from 1.0% to 0.5% for this year.