France: Economy contracts in Q4
February 14, 2013
In the fourth quarter, GDP fell 0.3% over the previous three-month period, according to a preliminary estimate released on 13 February. The decline contrasted the 0.1% rise seen in Q3, and exceeded market expectations that had the economy contracting 0.2%. In the full year 2012, French GDP growth was null.
The fourth quarter reading reflected a deterioration in both the domestic and the external side of the economy. Private consumption added 0.2% over the previous period (Q3: +0.3% quarter-on-quarter) while government consumption expanded a stronger 0.4% (Q3: +0.4% qoq). Meanwhile, gross fixed investment contracted a sharp 1.0%, which followed the 0.5% contraction seen in Q3. Furthermore, changes in inventories detracted 0.4 percentage points from overall economic growth.
Meanwhile, the net contribution from the external sector to overall growth fell from a 0.3 percentage-point contribution in the third quarter to a 0.1 percentage-point contribution in the fourth. Exports of goods and services decreased 0.6% in Q4 (Q3: +0.7% qoq), while imports contracted 0.8% (Q3: -0.5% qoq).
The government expects the economy to expand 1.2% in 2013.