French Q2 growth revised up to 0.3pc

29 Aug, 2019

The euro zone's second biggest economy grew 0.3% in the quarter, unchanged from the previous three months, the INSEE statistics agency said, revising the figure up from a provisional estimate of 0.2%

The relative resilience of the French economy contrasts sharply with the export-dependent German economy, which contracted 0.1% in the period as global trade tensions and the uncertainty over Britain's exit from the European Union took their toll.

In France, consumer spending growth - traditionally the motor of the broader economy - slowed to 0.2% from 0.3% in the first quarter.

Higher inflation ate into consumers' purchasing power, as households disposable income fell 0.2% after surging 0.8% in the first quarter due to a package of tax breaks and bonus schemes aimed at putting more money in the pockets of the poor.

The slower consumer spending was partially offset by a pick-up in business investment, which grew 0.9% after 0.6% in the first quarter as corporate profit margins increased to 33.1% - the highest since mid 2008 - from 32.6%.

Separately, INSEE said that consumer spending grew 0.4% in July from June, against economists' expectations for an increase of 0.3%.

Copyright Reuters, 2019

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