French GDP up 0.9% in Q2

France’s economy rallied at a faster pace than forecast in Q2, bolstered by household spending and investment.

This is according to flash data published on Friday by the INSEE statistics office.

GDP rebounded 0.9% between April and June after staying flat in the first quarter. Economists had predicted 0.8% quarterly growth.

In Q2, GDP was 3.3% under the level from 2019’s fourth quarter, compared to 4.2% in the two prior quarters, the statistics office added.

Moreover, gross fixed capital formation growth sped up to 1.1% from 0.4%, whereas household consumption expenditure rose 0.9% following the previous quarter’s 0.2% increase.

In regard to imports, there was a 1.9% increase in Q2 whilst exports edged up 1.5%. As such, foreign trade made a marginally negative contribution to GDP growth in France by -0.1 points, after -0.5 points in the first quarter.

Furthermore, the impact of inventory changes to the country’s GDP growth was slightly positive in the second quarter, standing at 0.2 points.

An additional report from the INSEE statistics office revealed household spending increased 0.3% last month following steep growth in May of 10.6%. This undershot the forecast by economists of 1.4%.

The rise in manufactured goods purchases of 2.7% was counteracted by 1.6% declines in energy expenditure and food consumption.

“It is an exceptional performance by the French economy,” Finance Minister Bruno Le Maire told France Inter radio, going on to add that the second quarter performance meant France was on course to hit the 6% annual growth target for this year.

Over the past few months, the eurozone’s second-largest economy has emerged from a lockdown imposed by President Emmanuel Macron on 31 March, with many businesses, shops and restaurants re-opening their doors.