The French economy contracted in the second quarter, a decline of 0.1 %, according to a new figures published on Friday 23 September by the Insee, which estimated that the growth had been zero (0.0 percent) over this period. This revision is made to a few days of the presentation by the government of the draft budget 2017, which calls for an annual increase of 1.5 %.
The institute, which was again confirmed at the end of August a 0% growth in the second quarter, has lowered the forecast because of ” the integration of indicators unavailable in the second estimation and the updating of the coefficients of corrections for seasonal variations, “, he stated at the publication of its third and final estimate of growth in the second quarter.
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The second-quarter performance contrasts with the strong increase in the gross domestic product (GDP) in the first which had reached 0.7 %. What are the expenses of household consumption, traditional engine of French growth, which fell 0.1 % between April and June, while the previous forecast projected a zero growth. In the first quarter, they had experienced a strong rise of 1.1 %. In the second quarter, household consumption ” is falling while their purchasing power improves, so that their savings rate is increasing “, from 14.5 % to 14.8 %, says Insee.
imports fell sharply from 1.8 % in the second quarter while exports have experienced a slight increase of 0.2 %. the ” Thus, the external balance contributes positively to the growth of the GDP, “, by 0.6 percentage points, highlights the Insee.
According to the Insee, the public deficit has decreased from April to June. The financing needs of public administrations (APU) declined by 0.2 percentage point of GDP, reaching 3.2 % of GDP (after a 3.4 %), thanks mainly to the ” income from sales of the 4G frequencies [that] contribute to reduce this deficit to the tune of 0.1 percentage point of GDP “. The expenditure has, however, slowed down, retreating 0.9 % to 0.2 %, ” after a first quarter boosted by the return to normal of the contribution of France to the budget of the european Union “, explains Insee.
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The government expects a 1.5% growth in 2016 and 2017 to return in the nails europe next year, with a public deficit under the fateful bar of 3% of GDP despite the new spending and tax cuts announced by the executive. This forecast is in line with the forecasts of the Bank of France, but more optimistic than the IMF (1.2 %) and the OECD, which lowered Wednesday to 1.3 %.