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France’s Q2 growth nearly stops on frail consumer spending

by ChemOrbis Editorial Team -
  • 29/07/2016 (14:34)
According to media reports, data from France’s statistics bureau Insee showed that France’s economic growth unexpectedly came to a standstill in April-June due to frail consumer spending and a fall in business investment. No growth was recorded for the second quarter. Analysts’ expectations were calling for a 0.2% growth rate for the second quarter, lower than the first quarter’s 0.7% quarter over quarter growth, according to a poll by Reuters.

France’s consumer spending indicated zero growth in the second quarter due to floods, strikes and violent street protests about a contested labor law. Business investment also declined 0.2% when compared to the first quarter as many companies wanted to utilize a tax write-off on some investments prior to its expiration. On the other hand, foreign trade made a 0.3% contribution to growth since imports declined more than exports, according to Insee.

French Finance Minister Michel Sapin stated that despite the disappointing numbers of the second quarter, the French government still adheres to its 2016 growth forecast of 1.5%.
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