French economic growth accelerates sequentially to 0.4 pct in Q4 2016

French economic growth accelerated on a sequential basis in the fourth quarter of 2016, while it was flat on a year-on-year basis. French statistical institute INSEE showed that the nation’s economy grew 0.4 percent on a sequential basis in the December quarter as compared with the 0.2 percent growth in the third quarter. On an average for the 2016 as a whole, the French economy grew 1.1 percent, as compared with the growth of 1.5 percent seen in 2015.

Household consumption expenditures grew 0.6 percent in the fourth quarter, while total gross fixed capital formation was up 0.8 percent. In all, final domestic demand, stripping inventory changes, gathered momentum adding 0.6 percentage points to the GDP growth. In 2016 as a whole, household consumption grew 1.8 percent in 2016, driven by household expenditure in home equipment in the first half of 2016.

In the meantime, exports were more dynamic, rising 1.1 percent, whereas imports decelerated to 0.8 percent. Overall, foreign trade balance added 0.1 percentage points to the GDP growth in the fourth quarter. However, for 2016 as whole, exports slowed down more than imports. Foreign balance was a drag to the growth for whole of 2016 as compared to 2015.

Meanwhile, changes in inventories weighed on the fourth quarter economic growth, subtracting 0.2 percentage points from the fourth quarter growth after adding 0.7 points in the prior quarter. This was mainly because of “other industrial products”. Over the year, the contribution of changes in inventories to the GDP was neutral, after adding 0.2 points in 2015.