The higher than expected growth in Q1: + 0.5% – The Point

Economic growth reached 0.5% of gross domestic product (GDP) in the first quarter in France, better than the 0.4% forecast, according to preliminary estimates released Friday by INSEE. This figure, up from the last quarter of 2015 (+ 0.3%) is explained by an increase in household consumption, its strongest since late 2004 (+ 1.2%), said INSEE in a statement. Spending on household consumption, traditional engine of growth in France were down 0.1% in the last three months of 2015, marked by the attacks in Paris.

“Our work bears fruit we will pursue it with determination in the coming months, “says Finance Minister Michel Sapin. “This is a solid growth that is engaged,” he adds. Throughout the first quarter of 2015, total goods and services output continued to grow at a steady pace (+ 0.6%, as in the last three months of 2015), according to INSEE. Business investment accelerated slightly, for their part, to + 0.9% after + 0.7% in the fourth quarter of 2015, INSEE added, which however reported a slight decline in exports (- 0.2% after + 1.0%).

unemployment falling

in its latest forecast, published in March, the National Institute of Statistics and economic studies had bet on growth of 0.4% in the first quarter. A figure which had then aligned the Bank of France and economists polled by Factset financial data provider. This encouraging figure echoed many good news announced this week, particularly on the unemployment front, which fell 1.7% in March, and in the building sector, with bets in new housing starts up 3 % year on year in the first three months of the year.

the government expects growth of 1.5% of GDP this year. A figure more optimistic than the European Commission, which is betting on a rise in activity of only 1.3%, and that the IMF has lowered its forecast mid-April to 1.1%, due to the slowing global economy. According Bercy, “over growth” for 2016, ie what would be the increase in GDP growth in case of zero over the rest of the year, is already 1% after the first quarter, “it which means that with less than 0.4% growth each quarter’s 1.5% target for the year will be reached. “