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Hopes hit as France reports 'disappointing' zero growth
Photo: AFP

Hopes hit as France reports 'disappointing' zero growth

AFP · 29 Jul 2016, 08:46

Published: 29 Jul 2016 08:46 GMT+02:00

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French growth stagnated in the second quarter of the year, statistics bureau Insee reported Friday, a "disappointing" result
that dashed hopes of a small economic expansion.

France's gross domestic product (GDP) showed no change in the three months to June, according to a first estimate, after rising a revised 0.7 percent in the first quarter.

The finance ministry called the flat figure "disappointing", given that Insee had predicted 0.3 percent growth and the Bank of France 0.2 percent.

The ministry said, however, that it stood by its own growth forecast of 1.5 percent for the full year 2016.

Consumer spending stagnated, having driven growth with a 1.2-percent increase in the three previous months.

Food spending dropped, as did services as start-of-year spending on tickets and accommodation for the Euro 2016 football championships dropped out of the equation, Insee said.

Investment also fell, both by companies and the public sector.

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Oil refinery strikes in May and June weighed on overall production, which dropped 0.2 percent, and the construction sector also weakened.

France's trade balance, however, made a positive contribution of 0.3 percentage points to GDP thanks to a sharp slowdown in imports of manufactured goods and oil products.

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