News ID: 252121
Published: 0858 GMT April 30, 2019

French economic growth held steady in Q1, at 0.3%

French economic growth held steady in Q1, at 0.3%


French growth held steady in the first three months of the year as household spending recovered after anti-government protests at the end of 2018, official data showed on Tuesday.

The eurozone’s second-biggest economy grew 0.3 percent in the January-March period, the third quarter in a row at that rate, showed preliminary data from the INSEE statistics agency, Reuters reported.

A Reuters poll of 27 economists had an average estimate of 0.3 percent.

Commenting on INSEE’s GDP report, Finance Minister Bruno Le Maire said the economy was performing better than many other European countries.

“There are some positive elements, investment is very important as well as consumer spending, because we have given purchasing power to households,” Le Maire said on France 2 television.

“But there are still some worrying elements like exports which show that we need to keep up efforts to gain competitiveness,” Le Maire added.

The government offered a €10-billion ($11.18 billion) package of concessions to protesters in December aimed at boosting the incomes of the poorest workers and pensioners.

President Emmanuel Macron followed up last week with a pledge to cut income tax by €5 billion after five months of weekly protests over the high cost of living and elitism.

Household spending, the traditional motor of French growth, grew 0.4 percent after stalling in the final three months of 2018, when spending was hit by some of the most violent street protests seen in decades.

INSEE said the improvement was seen particularly in services, with more spending in hotels and restaurants after an initial drop in tourist numbers in December due to the protests.

Meanwhile, business investment picked up only marginally, growing 0.5 percent after 0.4 percent in the fourth quarter when the unrest weighed heavily on business confidence.

Exports grew only 0.1 percent in the first quarter, slowing after an end of the year rush to deliver Airbus aircraft pushed up deliveries in the fourth quarter.

Import growth thus easily outpaced exports at 0.9 percent, which meant foreign trade subtracted 0.3 percentage points from growth, while business inventory building boosted output by 0.3 percent.




Resource: Reuters
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