French economic growth accelerates slightly in Q3, foreign trade contributes positively to GDP growth

The French economic growth accelerated a bit in the third quarter in terms of volume. According to the official statistical office Insee, the GDP growth accelerated to 0.4 percent from second quarter’s 0.2 percent growth. However, this is slightly below consensus expectations of a growth of 0.5 percent.

Delving into details total production accelerated in the third quarter. Production in goods and services rose 0.7 percent, an acceleration from 0.3 percent in the prior quarter. Goods production rebounded, growing 0.8 percent after falling 0.2 percent previously. Meanwhile, services production growth accelerated to 0.6 percent from 0.4 percent. Manufacturing output also rebounded in the quarter, rising 0.8 percent after falling 0.1 percent in the prior quarter. On the contrary, construction output came in flat after recording a rise of 0.6 percent in the prior quarter.

Meanwhile, household consumption rebounded in the third quarter. Household consumption expenditure grew 0.5 percent in the September quarter after growing 0.1 percent. Consumption of goods rose 0.6 percent, while that of the services accelerated a bit to 0.3 percent.

Expenditures on energy rebounded a bit to a rise of 0.4 percent. On the other hand, consumption of food products stabilized after two quarters of fall. Within service sector, transport expenses rebounded noticeably after a considerable fall in the second quarter.

Corporate investment continued to stay dynamic, whereas household investment dropped a bit. The total GFCF rose at nearly the same rate as in the previous quarter. It was sustained by corporate investment, mainly investment in IT activities and information services, as well as in automotive. On the contrary, household investment dropped a bit, owing to a fall in housing starts.

Meanwhile, foreign trade balance added positively to the GDP growth in the third quarter. Imports rose 0.7 percent, whereas exports decelerated to 0.3 percent. Overall, foreign trade added 0.1 percentage points to the GDP growth.

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