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French Q3 0.3 percent GDP growth beats expectations

Christian Fernsby ▼ | October 30, 2019
The French economy advanced 0.3 percent on quarter in the three months to September 2019, the same pace as in the previous two periods but above market estimates of a 0.2 percent growth, a preliminary estimate showed.
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Household consumption, government spending and fixed investment rose further while net foreign demand contributed negatively.

Topics: French GDP

In the third quarter, internal demand excluding inventory changes contributed 0.5 points to the GDP growth. Also, changes in inventories added 0.1 points.

In contrast, net foreign trade contributed negatively (-0.4 points).

Within domestic demand, household consumption growth accelerated slightly (0.3 percent vs 0.2 percent in Q2), mainly due to the rebound of the consumption of goods (0.4 percent vs –0.1 percent). On the contrary, consumption of services decelerated (0.3 percent vs 0.4 percent), due to a slow in expenditure on accommodation and food services after a dynamic second quarter.

Regarding goods, expenditures on engineered goods bounced back (1.6 percent vs –0.4 percent), driven by a rise in vehicle registration. Energy expenditures went back (–0.3 percent vs 0.8 percent). Finally, food expenditures decreased at a faster pace as in the previous quarter (–0.7 percent vs –0.1 percent).

At the same time, government spending rose by 0.4 percent, the same as in the June quarter. Fixed investment went up 0.9 percent, following a 1.2 percent growth in the prior quarter, as corporate investment grew at the same pace as the previous quarter (1.2 percent vs 1.1 percent), driven by expenditures in information-communication services and in transport equipment.

Household investment halted (0.1 percent vs 1.6 percent), after the rise of real estate transactions in Q2 2019.

Exports expanded 0.3 percent, reversing from a 0.1 percent fall in Q2; while imports grew at a faster 1.4 percent, compared to a 0.3 percent decline in Q2.

Year-on-year, the economy expanded 1.3 percent in the third quarter, following a 1.4 percent expansion in the previous three-month period.