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French second-quarter economic growth confirmed at 0.2 percent

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French second-quarter economic growth confirmed at 0.2 percent
FILE PHOTO: A general view shows the Eiffel Tower and the financial and business district in La Defense, west of Paris, France November 22, 2017. REUTERS/Gonzalo Fuentes   -   Copyright  GONZALO FUENTES(Reuters)
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PARIS (Reuters) – The French economy eked out meagre growth in the second quarter as households saved extra cash gained from a rebound in purchasing power, crimping consumer spending, official data showed on Friday.

The INSEE statistics agency said the economy grew 0.2 percent in the three months to the end of June, unchanged from a previous estimate and the same rate as that seen in the first quarter.

INSEE said households’ real gross disposable income rose 0.7 percent in the second quarter as inflation eased and the wealthy benefited from the scrapping of the wealth tax.

However, households stashed away the extra cash as the savings rate rose to 14.3 percent in the second quarter from 13.7 percent in the first quarter, while consumer spending suffered a rare dip.

INSEE had said in a previous growth estimate that consumer spending, which fell 0.1 percent in the second quarter, suffered due to transport strikes hitting travel spending. Unseasonably warm weather had also impacted energy spending.

Meanwhile, corporate investment rose 1.2 percent although firms’ profit margins fell to 31.5 percent from 32 percent in the first quarter, as productivity slipped while wages rose slightly.

(Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta)

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