The French economy grew by a stronger than expected 2 percent in 2017, its best performance since 2011, in a year marked by a surprise acceleration in investment from companies and households, official data showed on Wednesday. Buoyed by rock-bottom interest rates, a broad-based recovery among euro zone peers and lower payroll taxes, French companies bumped up investment to meet surging demand and more confident households returned to the property market.
The 2 percent increase over 2017, a tad higher than the 1.9 percent initially estimated, means France outpaced Britain, which grew by 1.7 percent last year, although gross domestic product fell short of the 2.5 percent in the wider euro zone. That marked a sharp acceleration from the performance of the previous five years, where the French economy flirted with stagnation, weighed down by mass unemployment and efforts to close a budget deficit via higher taxes.
The French government will take heart in the pick-up in investment, which bodes well for long-term growth. Companies' investment increased by 4.4 percent, while households' jumped by 5.4 percent, mainly on the back of property purchases.
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