Growth: Why France is down – Le Nouvel Observateur

Earlier this month, Manuel Valls had prepared the French in a “difficult” input. His finance minister reduced this time, Thursday, August 14, and confirmed in an article published in “Le Monde” French growth is “down.” According to the figures of unemployment and inflation, the latest GDP results published by INSEE show that the room for maneuver of the government – that focused on a “rollover” – are reduced a bit more. The executive will have to revise its forecasts. According to Michel Sapin, France will at best reach 0.5% growth this year.

• Production: still down

“Slack” according to Insee – 0.1% in the second quarter after rising 0.2% in the previous. Two indicators provide such a bleak outlook: Industrial production contracts with a decrease of 1% and construction activity fell by 1.5%. The situation in France should be seen in a European context where the numbers are not much better: by Eurostat in June in the euro area, industrial production fell 0.3%

• Investment: black spot in the building

1.1%: the decline in investment in the second quarter . It adds to the decrease of 1% in the first. Business investment, a decline of 0.8% is worrisome, but this trend affects all sectors of the economy: 0.5% for government or 2.4% for households. The black point is the decline in construction investment: -2.1% after -1.9% in the first quarter

• Foreign trade. Still rising

Foreign trade weighs on growth: it represents 0.1 percent of GDP. Exports stagnated. Imports, they continue to rise and increase of 0.4% but less rapidly than in the first quarter (+0.6%). The deficit in the trade balance continues to grow. Over ten years, it reached € 497 billion

• consumption. Suffers clothing

Expenditure Household consumption rose 0.5% in the second quarter. A recovery trompe l’oeil as it represents mostly a 3.5% jump in energy costs. For INSEE, this is a simple “back to normal” after a very mild winter. After a decline of 0.9%, food expenditure is also recovering 0.9%. The concern is spending well built, more indicative of the consumption of French. They are “slack” according to Insee 0.1%. Main area affected by this decline: clothing, which was down 2%

The only consolation for Valls government: France is (slightly) better than Germany. GDP in Germany fell by 0.2% in the second quarter when one of France does “that” stagnate.

L. M. -. N. O