No growth for France’s GDP in Q2

France’s gross domestic product was stable in the second quarter of 2016 on a quarterly basis after a 0.7% qoq rise recorded in Q1, French statistic institute Insee reported.

Expectations of a 0.3% growth in Q2 were disappointed but the French minister of Economy has maintained its expectations of a 1.5% rise in GDP for the whole year.

France GDP’s non growth in Q2 is mostly due to a slowdown in household consumption expenditure (0.0%)  after a dynamic first quarter (+1.2%), while total gross fixed capital formation dropped (-0.4% after +1.3%).

Goods (0.0% after +1.5%) and services (-0.1% after +0.7%) were both impacted. Insee observed that expenditure on housing equipment kept increasing while car purchases dropped.

“Consumption of food products sharply declined (-0.7% after +0.4%). Downturn in household consumption of services was due to repercussion of buying tickets for football Euro 2016 in Q1 and to a decline in spending on accommodation and food. By contrast, energy consumption barely slowed down (+1.4% after +1.7%),” Insee noted.

Imports significantly slumped (-1.3% after +0.5%), in particular these of manufactured goods and raw hydrocarbons, while exports slightly declined (-0.3% as in Q1).

A modest decrease has been stressed in production of goods and services (-0.2% after +0.7%) while the output in manufactured goods sharply dropped (-1.0% after 0.0%) “primarily due to a slump in refineries output, affected by social movements in May and June.”

“Production in construction also declined (-0.6% after +0.3%). In market services, it was stable (0.0% after +1.1%) while energy production decelerated (+0.5% after +1.0%),” Insee said.

Investments in construction decreased (-0.4% after +0.4%), as well as in manufactured goods (-0.9% after +3.5%) and in market services (-0.2% after +1.1%).

Overall, France’s foreign trade balance has had a positive contribution to the country’s GDP in Q2 (+0.3% after -0.2%).

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