October 30, 2018 / 6:37 AM / 19 days ago

French third-quarter economic growth picks up, but weaker than expected at 0.4 percent

PARIS (Reuters) - French economic growth picked up in the third quarter, albeit not as much as expected despite a rebound in consumer spending and a stronger business investment, according to data from the INSEE official statistics agency.

The financial district of La Defense is seen during sunset near Paris, France, September 25, 2018. REUTERS/Christian Hartmann/Files

The euro zone’s second-biggest economy grew 0.4 percent in the quarter, up from 0.2 percent in the previous three months, INSEE said on Tuesday in a first estimate for the July-September period.

However, the reading fell slightly short of an average estimate for 0.5 percent growth in a Reuters poll of 31 economists.

Household spending, traditionally the motor of French growth, grew 0.5 percent in the third quarter after falling 0.1 percent in the previous three months as strikes hit spending on transport in particular.

Meanwhile, business investment accelerated slightly to 1.4 percent in the quarter as firms stepped up outlays on digital technology while household investment, essentially new home purchases, declined in line with recent falls in housing starts.

Export growth outpaced that for imports, which meant that foreign trade added 0.1 percentage points to overall growth, while business inventory drawdowns subtracted 0.2 percentage points.

QUARTERS

Q4 Q1 Q2 Q3

Total GDP 0.7 0.2 0.2 0.4

Imports 0.3 -0.4 0.7 0.3

Household consumption 0.2 0.2 -0.1 0.5

Public consumption 0.2 0.1 0.2 0.2

Investment 1 0.1 0.9 0.8

- Business investment 1.3 0.1 1.3 1.4

- Household investment 0.8 0.2 0.0 -0.2

- Public investment 0.2 0.1 0.6 0.2

Exports 2.3 -0.4 0.1 0.7

Contributions to growth:

Domestic demand ex stocks 0.4 0.2 0.2 0.5

Stocks variations -0.3 0 0.2 -0.2

Trade balance 0.6 0 -0.2 0.1

Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta

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