French Economy Rebounds In Q3
October 29 2020 - 10:49PM
RTTF2
With the gradual easing of restriction to curb the spread of
coronavirus, the French economy recovered at a faster than expected
pace in the third quarter, preliminary data from the statistical
office Insee showed on Friday.
Gross domestic product expanded 18.2 percent after logging a
sharp 13.7 percent contraction in the second quarter. Economists
had forecast a sequential growth of 15.4 percent.
Nevertheless, GDP remained well below the level it had before
the health crisis. Compared to its level in the third quarter of
2019, GDP was 4.3 percent lower, the Insee reported.
All components of domestic demand rebounded sharply in the third
quarter. Household consumption expenditure surged 17.3 percent,
which was close to its pre-crisis level.
General government expenditure advanced 15.4 percent
sequentially. At the same time, total gross fixed capital formation
grew 23.3 percent.
Foreign trade also rebounded this quarter, especially exports,
which climbed 23.2 percent. Imports increased by 16 percent.
Overall, foreign trade made a positive contribution to GDP growth
by 1.2 points.
Finally, changes in inventories contributed negatively to GDP
growth by 1.9 points.
Earlier this month, the Bank of France said the economy expanded
16 percent sequentially in the third quarter. However, economic
output was 5 percent below the pre-crisis level, the central bank
estimated.
According to IMF, France's GDP will shrink 9.8 percent this year
before rebounding 6 percent in 2021.
Another report from Insee showed that household consumption
declined 5.1 percent on month in September, in contrast to a 2.2
percent rise in August. Spending was forecast to fall 1 percent in
September.
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