France GDP Contracts for 1st Time in Nearly 3 Years


French economy shrank 0.1 percent quarter-on-quarter in the June quarter of 2016, compared to stagnation in a preliminary reading and a 0.7 percent growth in the first quarter. It was the first contraction since the first quarter of 2013 as a rebound in exports was not enough to offset a decline in household consumption and investment.

In the  June quarter, households final consumption expenditure dropped by 0.1 percent (after  a 1.1 percent growth in the preceding quarter). In contrast, government spending grew by 0.4 percent, the same pace as in the previous three months. Total gross fixed capital formation decreased by 0.2 percent, after increasing 1.3 percent in the preceding quarter. Non-financial corporations' investment dropped by 0.4 percent, compared to a 2.1 percent growth in the March quarter. Final domestic demand excluding inventory changes made no contribution to GDP growth (after +0.9 points in the first quarter). 

Exports increased by 0.2 percent, rebounding from a 0.4 percent decline in the previous quarter. Imports fell 1.8 percent, compared to a 0.2 percent rise in the March quarter. That brought the foreign trade balance contributed positively to the economy (+0.6 points after -0.2 points in the preceding quarter). Changes in inventories also contributed negatively to GDP growth (-0.7 points after -0.1 points). 

Year-on-year, the economy expanded 1.3 percent, compared to a 1.4 percent expansion in the March quarter while markets estimated a 1.4 percent growth. 

France GDP Contracts for 1st Time in Nearly 3 Years


Insee l Rida Husna | rida@tradingeconomics.com
9/23/2016 1:20:30 PM