French economy surprises in Q2 with 0.5% growth

French economy surprises in Q2 with 0.5% growth

Exports, industry, and energy drove expansion despite rising prices and falling consumption.

After topping 6% early this year, French inflation dipped to 4.3% in July due to falling energy prices and food inflation. (AP pic)
PARIS:
The French economy saw a surprisingly robust performance in the second quarter, with 0.5% growth that exceeded forecasts, official data showed on Friday.

The figure was well above the INSEE statistics office’s own forecast of 0.1% growth for April to June compared to the first quarter, and better than expected by analysts.

The strong showing came despite a fall in household consumption in the period as shoppers struggled with inflation but were boosted by exports, the manufacturing industry and energy production.

In further positive news, year-on-year inflation in July dropped to 4.3%, mostly due to falling energy prices and cooling food inflation, after running at more than 6% earlier this year, INSEE added.

The robust growth is set to be highlighted by President Emmanuel Macron’s government at a time of multiple domestic political challenges and economy minister Bruno Le Maire described the performance as “remarkable”.

“For the first time, French growth is driven much more by exports,” he told RTL. “It starts a virtuous circle where it is production that is financing our social model and redistribution.”

The French economy grew 2.5% in 2022, keeping up with or even surpassing its European partners.

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