Tuesday, January 31, 2017

The French growth well below the forecasts of Bercy in 2016, Le Figaro

VIDEO – According to the Insee, the GDP increased by 1.1% over the whole of last year while the government was counting on an increase of 1.4%. The economy, however, has regained momentum in the fourth quarter, that welcomes Michel Sapin, minister of Economy.

The year 2016 ends on a very mixed picture for the French economy. According to a first estimate published by the Insee on Tuesday, the GDP growth accelerated in the fourth quarter to 0.4% after an increase of 0.2% in the third and a decline of 0.1% in the spring. This level does not allow the economy to reach the goal, yet already downgraded, Bercy, for the entire year. In 2016, the GDP grew by 1.1% according to the Insee, compared with 1.4% retained by the government. This is still less than the year 2015 that had ended with a growth of 1.2%.

in The fourth quarter, the growth has been driven by domestic demand. Household consumption, sluggish the previous two quarters, to rise again (+0.6 per cent) to display a progression of 1.8% on the year as a whole. Business investment has also rebounded in the fourth quarter (+1.3 percent) after two quarters the most gloomy, and shows a growth of 4.3% for the whole of 2016.

The investment of the households was at the same time accelerated in the fourth quarter (+0.9 percent), an increase that reflects the rebound in the real estate market. On the whole of the year, it climbed 1.5%. “(The housing market), driven in particular by the impact of the measures taken by the government to promote rental investment or home ownership, contributes again to the growth after having constituted a major impediment to the activity at the beginning of the quinquennium,” says Michel Sapin, minister of Economy and Finance, in a statement issued in the wake of the figures of the Insee.

The contribution of foreign trade was also positive in the fourth quarter, with an increase of imports less sustained (+0.8 per cent) that of exports (+1.1 per cent). But on the whole the year 2016, the foreign trade, of which the deficit is distributed much higher in the past year, shows a decline of 0.9%.

“all The indicators are again decidedly positive”

on The side of Bercy, one retains especially the progression of the different components of the growth in the end of the year. “Activity has clearly accelerated in the fourth quarter of 2016. All of the indicators are again decidedly positive,” says Bercy. “The year 2016 will have confirmed the upturn that began in 2015, which is now well established after three years of sluggish growth. For the second consecutive year, economic activity has been dynamic, to finally reduce unemployment while continuing to reduce its public deficit”, he adds.

“We have a surge of growth that is spectacular. With 1.1%, we have created jobs in France. With growth in household consumption, the morale of households, which is very, very high, we are on a good growth”, stated the minister at the microphone of France Inter this morning. “The quest of 2.5%-3% growth, it no longer makes sense”, he says.

In its note de conjoncture published by the end of 2016, the Insee estimated that a rebound strong growth should not be expected for early 2017. According to the institute, the growth could grow by 0.3% in the first quarter, and by 0.4% in the second. The government has set out in its texts budget that GDP would rise by 1.5% in 2017. A figure to be overvalued according to the opinion of the High council of public finance (HCFP). With the rise of the euro, the price of a barrel of oil and interest rates on the horizon, growth is expected to be “weaker than anticipated, the government, or even lower than in previous years,” confirms Christopher Dembik, head of economic research at Saxo Bank.


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