The French economy grew at a slightly slower pace at the end of 2015 on weak household spending and trade, preliminary figures from the statistical office Insee revealed Friday.
Gross domestic product climbed 0.2 percent sequentially after expanding 0.3 percent in the third quarter. The growth rate matched economists’ expectations.
In 2015 as a whole, GDP growth accelerated to 1.1 percent from 0.2 percent in 2014.
On the expenditure-side, growth in total gross fixed capital formation improved notably to 0.8 percent in the fourth quarter from 0.1 percent. On the other hand, household consumption expenditure fell 0.4 percent, reversing a 0.4 percent rise in the third quarter.
Thus, final domestic demand excluding inventory changes rose very slightly, but contributed positively to activity by 0.1 points.
At the same time, exports advanced 0.6 percent, offsetting similar size fall in the previous quarter. Meanwhile, imports kept on increasing, up by 1.6 percent, following a 1.5 percent rise.
Nonetheless, foreign trade balance contributed negatively to GDP again, by 0.3 points. Conversely, changes in inventories contributed positively by 0.5 points.
Total production in goods and services grew 0.5 percent after rising 0.3 percent. Manufactured industry produced more in the fourth quarter, with output growth of 0.9 percent.
On the other hand, energy production dropped 3.5 percent. Production in market services increased 0.5 percent, at the same pace as in third quarter. Activity in construction rebounded 0.7 percent after eight quarters of decline.
The International Monetary Fund forecast the second largest euro area economy to grow 1.3 percent in 2016.
It may look pessimistic now, but if 2016 unfolds as 2015, it may become reality, Julien Manceaux at ING Bank NV, said.
However, there are still reasons to hope for a more dynamic recovery: if private consumption rebounds once more thanks to a more stable job market and that investments increase faster, GDP growth could reach 1.6 percent this year, the economist noted.
Another report from the Insee showed that though consumer prices rose for the second consecutive month in January, inflation remained muted. Prices climbed 0.2 percent year-on-year in January, the same rate as seen in December.
The material has been provided by InstaForex Company – www.instaforex.com