Paris, July 29, 2016 – Coup unexpected stop to growth in the second quarter – L’Express

The National Institute for Statistics and Economic Studies has however revised slightly higher growth in the first quarter to 0.7% instead of 0.6%.

The Department of Finance found that the figure for the second quarter was “ disappointing in view of the particular forecasts of INSEE and Bank of France “, which called for share on growth of 0.2%.

But he immediately assured that the French economy remained on a “ dynamic recovery “, and zero growth in the second quarter not recovering “ not in question the forecast 1.5% growth in 2016 . ”

For now, the growth overhang – that the annual growth of GDP in case of zero over the last two quarters growth – stood at 1.1%, according to INSEE.

For Mathieu Plane, the French Economic Observatory (OFCE), the backlash, even though it was expected, is “ very strong ” and therefore “ surprising . ”

“ With a number of macroeconomic conditions, the maturing of some devices such as competitiveness employment tax credit (CICE), the output of the austerity policy, politics accommodative European Central Bank, one might expect an acceleration of growth , “he told AFP. “ But it does not occur “, which is is “ not good “, he continues.

“ The question is to know what will be the extent of the rebound can be expected on the third and fourth quarters “, for his part stressed Philippe Waechter, chief economist at Natixis.

“ What are the factors that will help to reverse the trend and regain growth elements that will tender to the 1.5% promised by the government ” if he asks.

– The investment in the heart of the issues –

traditional growth engine in France, household consumption stagnated in the second quarter, after the first dynamic (+ 1.2%).

Food Consumer spending in particular declined sharply, by 0.7%, after + 0.4% in the first three months of the year. services consumption has fallen from his side of 0.1% against 0.7%, “ backlash after buying tickets to the Euro 2016 football in the first quarter ” and result the “ reorientation of spending-catering accommodation ” explains INSEE.

The capital expenditure for their part are folded, 0.4%, after rising 1.3% in the first quarter. In detail, those companies declined 0.2% and public administration by 1.7%.

“ There was a overdamping tax effect, particularly on the business side, which could play a lot ” observes Mr. Plane. This exceptional tax deduction mechanism on productive investment, which was to end in April, was finally extended, but the decision was announced late, which could explain the acceleration of investments in the first quarter.

For Philippe Waechter, the challenge for the rest of the year will turn around the investment.

Brexit, attacks, presidential elections in the United States … “ all these phenomena creates uncertainty and may encourage entrepreneurs to postpone investment ” fear economist.

The total output of goods and services, also declined slightly (-0.2%). In particular, “ the production of manufactured goods declined sharply (-1.0% after 0.0%) due mainly to the fall in production in refineries affected by strikes in May and June , “said INSEE.

In the construction sector, which was just starting to give signs of recovery, it dropped by 0.6%, after + 0.3% in the first quarter.

Foreign trade – including a sharp decline in imports of manufactured goods and crude oil – has instead contributed positively to GDP by 0.3 percentage point of GDP.

edy / cb / gf