(Boursier.com) – Finally some good news on the economic front! French growth accelerated in the first quarter, with GDP growing by 0.6% compared to the previous quarter, after just 0.1% in Q4 2014, INSEE said Wednesday. This is the best performance of the French economy since the second quarter of 2013, when GDP increased by 0.7% …
Consumption up
Thanks including lower energy prices and the euro, the hexagon has experienced a larger than expected rebound in industrial production early in the year, while household consumption was supported by the fall of fuel prices, with a rise of 0.8% after + 0.1% in Q4, 2014.
This publication exceeds the expectations of economists and government. In its March monthly report, the National Institute of Statistics e himself was counting on further growth of only 0.4%. The Bank of France on his side was counting on an increase of 0.3% over the period, while analysts polled by ‘Bloomberg’ were a bit more greedy (+ 0.4%, based on 25 estimates).
Sapin up to the plate
This good surprise enhances the credibility of annual growth forecast of 1% of GDP, made by the French Government for 2015 … The Minister of Finance, Michel Sapin, even confirmed this Wednesday on RTL ‘and’ BFM ‘that this forecast was “a floor”, which should be exceeded this year.
The return to growth, together with a deficit Public slightly below expectations in 2014 (4% of GDP), should also remove the fears of sanctions of the European Union. Brussels should, however, keep the pressure on Paris, and ask him this Wednesday to accelerate the implementation of structural reforms …
Negative contribution of foreign trade
In the first quarter the total goods and services output rose 0.7% after stagnating end of 2014, notes the INSEE. Manufacturing output jumped 1.3% after + 0.1% in Q4, thanks to ‘transport equipment’ (+ 5.6% after -2.4%). Energy production also rebounded, while in market services, output accelerated more moderately (+ 0.6% after + 0.3%). In contrast, construction activity fell sharply again (-1.0% after -0.9%), INSEE said.
Foreign trade contributed negatively to growth . Exports have slowed (+ 0.9% after + 2.5%) while imports have accelerated (+ 2.3% after + 1.5%). On arrival, the external balance contributed negatively to GDP growth (-0.5 point after +0.2 point in the previous quarter). Inventory changes have however contributed positively to growth in activity in the first quarter 2015: 0.5 points after 0.3 points in the fourth quarter
More moderate growth in Q2.
The question is whether the rebound is sustainable, so that the positive effects of the decline of the euro and oil prices could recede a bit in the second quarter, especially as these two elements began a rebound since April … The Bank of France said Tuesday it expected a moderate growth of 0.3% in the second quarter. The “increase in production is expected to continue in May,” after April in which “industrial production and deliveries” continued to grow, said BdF, based on a survey of Heads company. Activity in services should also grow in May, but the building will continue to suffer, with a “slight decrease in activity” in May, after a month of April “stable”.
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