France’s Q2 Economic Growth Finalized at 0.3% by INSEE

On August 29, France’s national statistics agency INSEE confirmed that the country’s economy expanded by 0.3% in the second quarter, aligning with earlier estimates and reinforcing signs of gradual recovery in the eurozone’s second-largest economy.

The final data matched the average projection from a Reuters survey of 21 economists, which had anticipated a 0.3% increase.

According to INSEE, exports showed modest improvement, rising by 0.5% after a 1.2% decline in the prior quarter. This rebound was largely driven by a surge in pharmaceutical shipments.

Household consumption, a longstanding pillar of economic expansion in France, edged up to 0.0% following a 0.3% contraction. Growth in spending on food and services helped balance out a significant 2.4% drop in energy expenditures during the quarter, compared to a 0.8% increase in the first three months of the year.

In its June outlook, INSEE projected that quarterly growth would stabilize at 0.2% from the second quarter through the end of 2024.

Despite these signs of resilience, France continues to face challenges related to sluggish economic performance and a substantial fiscal shortfall.

Prime Minister Francois Bayrou has set a goal to reduce the budget deficit from 5.4% of GDP this year to 4.6% by 2026, with the longer-term objective of meeting the European Union’s 3% deficit threshold by 2029.

His minority government’s proposed austerity measures will face a confidence vote on September 8, serving as a critical test of political support for his fiscal reform agenda.

— news from Reuters

— News Original —
French economic growth confirmed at 0.3% in second quarter – INSEE

Aug 29 (Reuters) – France’s economy grew slightly in the second quarter, final data from statistics office INSEE showed on Friday, confirming the preliminary reading of 0.3% that showed the euro zone’s second-largest economy gaining momentum. n nThe result was in line with an average forecast of 0.3% in a Reuters poll of 21 economists. n nSign up here. n nExports rebounded moderately to +0.5% after -1.2% in the previous quarter, boosted by a strong rise in exports of pharmaceutical products, the statistics office said. n nHousehold consumption, the traditional driver of French growth, rebounded slightly to 0.0% from -0.3% in the previous quarter, as an increase in spending on food and services offset a sharp drop in energy spending (-2.4% in Q2 after +0.8% in Q1). n nQuarterly growth in France is forecast to hold at 0.2% from the second quarter through the remainder of the year, INSEE had said in June. n nFrance is grappling with relatively slow economic growth and and a high budget deficit. n nPrime Minister Francois Bayrou wants to reduce the budget deficit from 5.4% of GDP this year to 4.6% in 2026, ultimately targeting the EU’s 3% fiscal deficit limit by 2029. n nA confidence vote on September 8 will test Bayrou’s minority government over his ambitious budget-cutting plans. n nReporting by Alban Kacher; Editing by Matt Scuffham

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