France’s economic growth accelerated at a faster-than-expected pace in the second quarter, underpinned by household spending and investment, first estimates from the statistical office Insee revealed on Friday.<\/p>\n
In July, consumer price inflation slowed to a three-month low, driven by the downturn in manufactured goods prices and the slowdown in services price growth, separate data from the Insee showed.<\/p>\n
Despite the restrictions in place to curb the spread of coronavirus<\/span>, gross domestic product rebounded 0.9 percent in the second quarter, after being flat in the first quarter. Economists had forecast a quarterly growth of 0.8 percent.<\/p>\n In the second quarter, GDP was 3.3 percent below the level of the fourth quarter of 2019, as compared to 4.2 percent in the two previous quarters, the statistical office said.<\/p>\n In the latest World Economic Outlook, the International Monetary Fund forecast the French economy<\/span> to grow 5.8 percent in 2021 and 4.2 percent next year. <\/p>\n The expenditure-side breakdown of GDP showed that gross fixed capital formation growth accelerated to 1.1 percent in the second quarter from 0.4 percent in the preceding period.<\/p>\n Likewise, household consumption expenditure gained 0.9 percent after rising 0.2 percent a quarter ago.<\/p>\n Imports climbed 1.9 percent sequentially and exports advanced 1.5 percent. As a result, foreign trade made a slightly negative contribution to GDP growth by -0.1 points, after -0.5 points in the previous quarter.<\/p>\n Lastly, the contribution of inventory changes to the growth of the GDP was slightly positive this quarter, at 0.2 points.<\/p>\n Another report from the statistical office showed that household spending grew 0.3 percent in June after a sharp growth of 10.6 percent in May. This was also weaker than the economists’ forecast of 1.4 percent.<\/p>\n The increase in purchases of manufactured goods by 2.7 percent was offset by 1.6 percent declines in both food consumption and energy expenditure. <\/p>\n In a separate communiqu\u00e9, the Insee said consumer price inflation slowed to 1.2 percent in July from 1.5 percent in the previous month. But this was above economists’ forecast of 1 percent. <\/p>\n Similarly, harmonized inflation eased less-than-expected to 1.6 percent from 1.9 percent in June. The expected rate was 1.4 percent.<\/p>\n Manufactured product prices dropped 1.1 percent, while food prices gained 0.8 percent. Services prices grew at a slower pace of 0.7 percent. Meanwhile, energy price inflation rose to 12.4 percent from 10.9 percent.<\/p>\n On a monthly basis, consumer prices edged up 0.1 percent, the same as in June. Prices were forecast to fall 0.1 percent.<\/p>\n The harmonized index of consumer prices grew 0.1 percent, slower than the 0.2 percent rise a month ago. Economists had forecast a monthly fall of 0.1 percent. <\/p>\n