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Euro zone GDP surprises, France shines

Tuesday, October 31, 2017 - 01:31

The latest growth and inflation data shows France expanded at its fastest pace since 2011 in the third quarter, boosted by an acceleration in consumer spending and robust investment. David Pollard reports.

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France gets new anti-terrorism laws ... Measures signed by its president on Monday supersede a state of emergency that's been in place since attacks two years ago. And though controversial, could reassure an economy still in recovery mode. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "Consumers have started to feel a little bit more confident about going out and spending money and business has started to become a little bit more confident." That confidence translating into France's best quarter of growth in six years. Q3 GDP ticked along at 2.2 per cent. The two previous quarters also revised up. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "For the past 10 years the French economy has been a serial underperformer. Now I think with the election of Emmanuel Macron, you've got an awful lot of unlocked investment spending started to get unleashed and you're getting to see a significant rebound." For the euro zone too, the numbers are better than expected. A 2.5 per cent growth rate in Q3 - unemployment falling to its lowest level in almost nine years. Though at almost nine per cent it's still seen as way too high. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "It's going to feed into the narrative that ultimately while the ECB is looking to taper its bond buying program, it's going to be a very very slow withdrawal over the course of the next 18 months." Especially if the ECB continues to struggle with an inflation rate now reported at 1.4 per cent. Down from 1.5 in September - and still distant from the ECB's target of close to two.

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Euro zone GDP surprises, France shines

Tuesday, October 31, 2017 - 01:31