France: Growth was disappointing in Q2

The Q2 growth number for the second quarter was disappointing in France. It was just 0,158% (non annualized) which is rounded at 0,2%. It’s the same figure than in Q1 (0,153%).

Carryover growth is just 1.3% for 2018 at the end of the second quarter. The government growth target in the 2018 budget is 1.7%. This is attainable if growth is at 0.55% in Q3 and in Q4. We can’t imagine the reason of this stronger momentum during the second half of 2018.

Households consumption is the weakness of the French growth since the beginning of the year. Change in the purchasing power was negative in Q1 for fiscal reason (higher taxes) and was probably negative also in Q2 due to a higher inflation rate. Corporate investment was higher in Q2 (good news) after a very weak number in Q1.

For 2018 we can expect a growth figure close to 1.5% which will be way below the 2.3% seen in 2017.

This mean that the public deficit target at 2.3% of GDP will not be reached. It will remain close to its 2017 level at 2.6%.

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