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French economy stalls as Germany sees growth

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French economy stalls as Germany sees growth
The French finance ministry at Bercy on the River Seine is optimistic despite stagnation of growth. Photo: AFP
08:22 CEST+02:00
There was some bad news for France on the economic front on Friday, when new figures revealed that the struggling economy had stagnated in the second quarter of 2015, in contrast to their German neighbours.

The French economy once again ground to a halt in the second quarter of 2015, underlining the fragility of the recovery in the eurozone.

France's economy stagnated in the second quarter after an encouraging 0.7 percent rise in GDP in the first quarter, with investment falling away, according to official statistics released Friday.

Finance Minister Michel Sapin insisted that the figure, despite being less than initially predicted, was still in line with the government’s objectives.

“After a very dynamic first quarter, the level of activity has been maintained,” said Sapin. “At the end of the first semester, the growth achieved is 0.8 percent, which is in line to hit our target of 1 percent for the year 2015, said Sapin.

But the government, which has been pinning its hopes on growth to tackle the country's chronic unemployment problems, will not have been cheered by slowing growth in investment, which rose only 0.2 percent compared to 0.6 percent in the first quarter.

Consumer spending also slowed sharply, from a 0.9 percent rise in the first three months of 2015 to only 0.1 percent in the second quarter.

In one good sign, however, the contribution France's exports made to the economy rose by 0.3 percent, while imports slowed by 1.6 percent.Finance Minister Michel Sapin insisted that the second biggest economy in the eurozone was still on course to post 1 percent growth over the year as a whole.

There was slightly better news over the Rhine for Europe’s biggest economy.

Figures revealed on Friday showed the German economy had grown by 0.4 percent, slightly down on the 0.5 percent that was forecast.

Analysts had been projecting marginally stronger growth of 0.5 percent for the second quarter.

"The German economy continued along its positive growth path," the statisticians said.

"Positive impulses came primarily from foreign trade. Exports grew a lot faster than imports thanks to the weak euro, with goods exports in particular growing strongly."

But consumer spending and government spending also increased.

 

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