France: Economy contracts in Q4
March 27, 2013
In the fourth quarter, GDP fell 0.3% over the previous three-month period, according to data released by the National Statistical Institute (INSEE). The reading matched the preliminary estimate released on 14 February and contrasted the 0.2% rise seen in Q3. In the full year 2012, French GDP growth was null, down from the 1.7% expansion tallied in 2011. The fourth quarter reading reflected a deterioration in both the domestic and the external side of the economy. Private consumption fell 0.1% over the previous period (Q3 2012: +0.1% quarter-on-quarter) whereas government consumption expanded 0.3% (Q3: +0.4% qoq). Meanwhile, gross fixed investment contracted 0.8%, which followed the 0.4% decline seen in Q3. Furthermore, changes in inventories detracted 0.4 percentage points from overall economic growth. On the external sector, exports of goods and services decreased 0.6% in Q4 (Q3: +1.0% qoq), while imports contracted 1.2% (Q3: -0.2% qoq). As a result, the net contribution from the external sector to overall growth inched down from a 0.3 percentage-point contribution in the third quarter to a 0.2 percentage-point contribution in the fourth. FocusEconomics Consensus Forecast panellists project a zero growth rate for this year, which is unchanged from last month's forecast. In 2014, panellists anticipate economic growth to reach 0.9%.