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France GDP Rebounds More Than Expected In Q2

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The French economy rebounded more than expected in the second quarter driven by foreign demand and investment, the first estimate published by the statistical office Insee showed on Friday.

Gross domestic product grew 0.5 percent in the second quarter from the preceding quarter, when the economy shrank 0.2 percent. GDP was forecast to grow 0.2 percent.

On the expenditure side, foreign trade contributed to +0.4 points to GDP growth as exports grew 0.8 percent, while imports dropped 0.6 percent.

Household consumption expenditure fell again, but more moderately by -0.2 percent after easing 1.3 percent a quarter ago. Gross fixed capital formation continued to grow at a rather vigorous pace, up 0.5 percent, as in the previous quarter.

Meanwhile, government spending slid 0.2 percent after staying flat in the previous quarter.

Finally, the contribution of inventory changes to GDP growth was weakly positive this quarter, up 0.1 points.

In the Summer economic forecast, released this month, the European Commission forecast France's GDP to expand 2.4 percent this year and 1.4 percent in 2023.

In a separate communiqué, the Insee said household spending grew 0.2 percent in June, confounding expectations for a decline of 0.6 percent. Nonetheless, consumption was slower than the revised 0.4 percent increase in May.

The growth in June reflects the 3.1 percent rebound in energy spending and slower decreases in manufactured goods and food consumption.

In the second quarter, household consumption of goods decreased 1.3 percent, data showed.

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