/The French growth failure is confirmed
The French Growth Failure Is Confirmed

The French growth failure is confirmed

The French gross domestic product has increased neither in the first nor in the second quarter, according to INSEE.

The Minister of the Economy, Emmanuel Macron, his colleague of Finance, Michel Sapin, and François Hollande, on September 15, 2014 at the Elysee Palace.  (ALAIN JOCARD / AFP)

INSEE confirms France’s growth failure in the spring. The French gross domestic product did not increase in either the first or the second quarter. L” National Institute of Statistics and Economic Studies (Insee) paints a picture of a slow-moving French economy, supported only by consumption and the State, while companies are struggling to restart. INSEE validates, Tuesday, September 23, his first estimate of August 14.

Household purchasing power increased in the second quarter, 0.5% compared to the first, thanks to wages which continue to rise. But the margin rate of French companies, one of the lowest in Europe, on the contrary deteriorated to 29.3%, against 29.8% at the start of the year.

Investments and morale at half mast in the private sector

The overall trends remain the same. THEHousehold consumption expenditure rose 0.4% in the second quarter (against an initial estimate of + 0.5%). Those of general government also increased by 0.4% (first estimate of + 0.5%). On the contrary, business investment fell by 0.7% (first estimate of -0.8%). Saccording to INSEE, the morale of French entrepreneurs in all sectors deteriorated slightly in September.

The contribution of foreign trade was slightly negative, costing 0.1 activity point. Blame it on a generally slowed down activity. Exports came to a halt (+ 0.1% against + 0.6% in the first quarter) and imports also slowed (+ 0.4% against + 0.8% in the first quarter). This Underperformance in the second quarter forced the government to bury its growth hopes: the official forecast is now 0.4% for 2014, and 1% next year.