France: Economic growth slows in Q3
November 12, 2010
In the third quarter, gross domestic product increased a seasonally adjusted 0.4% over the previous quarter, according to the first estimate released by the National Institute of Statistics and Economic Studies (INSEE, Institut National de la Statistique et des etudes economiques). The reading reflected a deceleration compared to the 0.7% increase recorded in the second quarter but undershot market expectations, which saw GDP expanding 0.5%. On an annual basis, the economy expanded 1.8% in the third quarter, which exceeded the 1.6% annual rise recorded in the previous quarter. The deceleration in the third quarter was driven by a deterioration in the external sector and a slowdown in investment. Private consumption rose 0.6% over the previous period (Q2: +0.3% quarter-on-quarter), while gross fixed investment decelerated from a 0.9% increase in the second quarter to a 0.5% expansion. In addition, the net contribution of the external sector to overall growth deteriorated from minus 0.4 percentage points in the second quarter to minus 0.5 percentage points in the third, as exports of goods and services rose 2.5% (Q2: +2.6% qoq) while imports increased a more marked 4.1% (Q2: +3.9% qoq). At a sector level, the third quarter reading reflected improvements in agriculture and services, while growth in industry moderated compared to the previous period. INSEE expects the economy to expand 1.6% this year, according to its quarterly economic outlook from October.