France: Economic growth stalls for third consecutive quarter
August 14, 2012
In the second quarter, GDP was flat over the previous quarter, according to a preliminary estimate released on 14 August. The reading marked the third consecutive quarter of zero growth but defied market expectations of a 0.1% contraction. On an annual basis, the economy expanded 0.6% in Q2, up from the 0.2% annual rise recorded in the previous quarter. The second quarter reading reflected how a slight improvement in the domestic sector, buttressed by stronger investment, was entirely offset by a negative contribution from the external sector. Private consumption fell 0.2% over the previous period (Q1: +0.2% quarter-on-quarter) whereas government consumption expanded 0.5% (Q1: +0.5% qoq). Meanwhile, gross fixed investment rose 0.6%, which contrasted the 0.8% contraction seen in Q1. In contrast, the net contribution from the external sector to overall growth deteriorated from a 0.1 percentage-point detraction in the first quarter to minus 0.5 percentage points in the second, as imports outpaced exports. Exports of goods and services rose 0.2% in Q2 (Q1: +0.1% qoq), while imports added a stronger 1.8% (Q1: +0.6% qoq).