France GDP Growth Slows In Q3

(RTTNews) - The French economy posted a slower growth in the third quarter, thanks to a stagnation in household spending due to high inflation, and the weak foreign demand, preliminary data from the statistical office INSEE revealed Friday.

Gross domestic product grew 0.2 percent from the second quarter, when the economy expanded 0.5 percent. The pace of growth came in line with economists' expectations.

On the expenditure-side, household consumption expenditure remained flat after a 0.3 percent rise. On the other hand, government spending rebounded 0.5 percent, following a 0.1 percent drop.

Gross fixed capital formation accelerated strongly by 1.3 percent in the third quarter compared to a 0.4 percent gain a quarter ago.

Foreign trade contributed negatively to GDP growth by -0.5 points as growth in exports eased to 0.7 percent from 1.3 percent, while imports growth advanced to 2.2 percent from 1.2 percent.

Finally, the contribution of inventory changes to the evolution of GDP was slightly positive this quarter by +0.2 points after +0.3 points in the second quarter.

Driven by the rise in spending on engineered goods purchases and energy expenditure, household consumption growth accelerated to 1.2 percent in September from 0.1 percent in August, the statistical office said in a separate communiqué.

Quarterly national accounts reports are due from Germany and Spain later today. The largest euro area economy is forecast to shrink 0.2 percent in the third quarter largely due to energy shortage. Elsewhere, Spain's economic growth is expected to ease sharply to 0.3 percent in the third quarter from 1.5 percent a quarter ago.

The International Monetary Fund forecast France's GDP growth to slow sharply to 2.5 percent this year and to 0.7 percent next year. The IMF expects Germany and Italy to post economic contractions next year.