Friday, December 23, 2016

France-Acceleration of growth in the end of the year – Boursorama


 * Growth in the 3rd quarter was confirmed at +0.2 per cent * The recovery in consumption is confirmed * A engine internal is still lacking for 2017 (With comments from economist, details) by Miriam Rivet in PARIS, December 23 (Reuters) - The French economy is expected to accelerate in the end of the year under the impetus of rebound of household consumption, and this more especially as the slowdown has occurred since the spring was a little more marked than expected, according to data released Friday by Insee. Insee confirmed that the gross domestic product (GDP) of France had returned with a timid growth of 0.2% in the third quarter after its air hole of 0.1% in spring. But slight downward revisions on several components, including agricultural production due to inclement weather, has led him to review the acquired growth at the end of September for the whole year to 1.0% from 1.1% previously. At this level, the increase in GDP 2016 France would be limited to +1.1 per cent if,    as provided by the Insee and the Banque de France, it rose 0.4% in the last quarter . It is thought to be significantly below the objective, however, revised downwards, from 1.4% retained by the government. But Insee also published Friday a number of household consumption in goods for the month of November, up 0.4%, where economists were expecting a slight decrease (0.1 per cent). This traditional motor of the French economy, which has been lacking growth in the spring and this summer, is expected to be more dynamic in the end of the year, especially as the purchasing power of households has significantly accelerated in the third quarter (+0.6% after +0.2 per cent). Following on from a rise of 0.8% in October, the increase of the consumption in November is added to a series of other positive indicators. The ministry of Housing has published figures are always dynamic for the housing starts and building permits, the latter reaching the last month a new high since June 2013. The tren   d for the fourth quarter is also well oriented on the business side, evidenced by the significant improvement of the business climate in the surveys published by the Insee mid-December. The numbers of temporary employment published on Friday by Prism'employment are added to this table, with a new acceleration in the pace of growth in the workforce, to +9.5 per cent. CONCERNS FOR 2017, But the long-term horizon appears to be less favourable, in particular because of the stability margins of the companies surveyed by Insee in the third quarter, to 31.5%, and the stagnation of business investment. In the recent period, the recovery of the margin rate of businesses has been driven by circumstantial factors such as the drop in oil prices, the decline in interest rates and measures type tax credit competitive employment (CICE) or suramortissement investment, " explains Axelle Lacan, an economist from the institute COE-Rexecode. "But we see today that the adjustment of margin rate is slowi   ng and, therefore, the question arises as to the dynamic future of business investment", she said. It could penalize a domestic demand will also suffer, already the next year by a deceleration of household consumption under the effect of the decline in their purchasing power linked to the rise in oil prices. In the third quarter, the contribution of domestic demand to growth remained limited, even if it has been revised slightly up (+0.2 percentage points against +0.1). The foreign trade, the negative contribution stood at 0.6 points, on the other hand might in the next few months to benefit from the depreciation of the euro. "It was expected in 2017 to see it disappear both the effects of cheap oil, low interest rates and the weak euro. But in the end, the euro is rather extended, therefore, to our external trade, it could be a element a bit more favorable than what we had anticipated just a few months," said Axelle Lacan. Overall, the economist is looking forward to "the better en   d of 2016," but sends "a few fears about the year 2017 due to the change of environment, which unfortunately is not accompanied by a strengthening of the intrinsic dynamics of the French economy." Detailed statistics on the Insee website : - to the GDP : - for household consumption : indicators French real-time ECONFR indicators of the euro area in real-time ECONEZ The point on the French economy ECO/EN (edited by Yann Le Guernigou) 

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