France: INSEE confirms 0.4% growth in the third quarter

The French economy recorded a growth of 0.4% in the third quarter, with growth in gross domestic product (GDP) accelerating compared to 0.2% in the first and second quarters, according to the second estimate published Thursday by INSEE.

As in the first estimate, the growth acquis for the whole of 2018, ie the evolution of GDP if activity stagnated completely in the fourth quarter, amounts to 1.5%.

At this level, the 1.7% target chosen by the government for the current year seems difficult to achieve, since it would require, according to Reuters calculations, a 0.8% increase in GDP in the fourth quarter.

INSEE and the Banque de France are currently forecasting growth of around 0.4% in the fourth quarter.

Compared to the first estimate published at the end of October, the contribution to the growth of final domestic demand was confirmed at 0.5 point and that of foreign trade was revised up slightly (0.2 point against 0.1 point previously). ).

The changes in inventories, for their part, weighed a further -0.3 points (compared with -0.2 points in the first estimate).

In detail, total production of goods and services accelerated in the third quarter (+ 0.6% after + 0.3%), as a result of a recovery in goods production (which rose by 0%). 6% after a decline of 0.3% in the previous quarter) and a slight acceleration in services.

Manufacturing output rebounded, rising 0.7% after a 0.1% decline in the second quarter, driven by a sharp rebound in refinery output, back in the green after being severely curtailed by maintenance operations in the second quarter.

In the third quarter, the rebound in household consumption is slightly less pronounced than previously announced, with an increase of 0.4% against 0.5% in first estimate. It had registered a decline in the second quarter, an unusual phenomenon related in particular to strikes in transport, especially the SNCF.

Beyond household consumption, domestic demand in the third quarter was also fueled by the confirmed dynamism of business investment (+ 1.6%, against + 1.4% in first estimate).