French growth at 0.3% in the second quarter is more than expected


Illustration image of the INSEE entrance in Montrouge. – Aurore MESENGE / AFP

Economic growth reached 0.3% in France in the second quarter, a figure slightly higher than what was originally announced (0.2%), according to a second estimate released Thursday by

This revision, which according to INSEE is explained by seasonal adjustments, confirms the objectives set by the government, which is expecting a gross domestic product (GDP) increase of 1.4% for the whole of 2019 This figure was achieved despite disappointing household consumption, which grew by only 0.2% between April and June, despite gains in purchasing power related to the emergency measures adopted during the crisis.
"Yellow vests".

A declining savings rate

According to the public body, consumption fell by 0.2% in the food sector and by 0.5% in the manufactured goods sector. Purchases of services grew by 0.5%, the same pace as in the previous quarter. The saving rate of French households, the highest since the end of 2018, for its part slightly decreased, while remaining at a high level: it was established according to INSEE at 14.9% against 15.3% in the first quarter.

Investment, another engine of French growth, remained very dynamic: according to INSEE, it reached 0.9%, after having increased by 0.5% in the first quarter, driven by the investment of businesses (+ 0.9%). Exports, on the other hand, remained stable, while they had increased slightly (+ 0.1%) between January and April.

A "solid" growth

Imports fell (-0.2% after + 1.1%), as a result of the decline in hydrocarbon purchases, the contribution of the external balance to growth was slightly positive at +0.1%. point against -0.3 point in the previous quarter, according to INSEE. Lastly, inventory changes weighed negatively on activity, slowing growth by 0.2 percentage point of GDP after having boosted it by 0.3 points in the first quarter.

"We have a level of growth that is solid," said Tuesday on LCI the Minister of Economy Bruno Le Maire, who said maintain its growth forecast to 1.4% for the whole of 2019. "We'll see within a month if there is any need to revise this figure, "he said. According to the Banque de France, but also according to the OECD, the IMF and the European Commission, economic activity should grow 1.3% this year, against 1.7% in 2018.

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