French second-quarter growth slows unexpectedly to 0.2%

French second-quarter growth slows unexpectedly to 0.2%
FILE PHOTO - People walk on the esplanade of La Defense in the financial and business district of La Defense, west of Paris, France March 26, 2018. REUTERS/Gonzalo Fuentes   -  Copyright  GONZALO FUENTES(Reuters)
By Reuters

PARIS (Reuters) – French growth slowed slightly in the second quarter as consumer spending eased and companies drew down inventories, official data showed on Tuesday.

The euro zone’s second-biggest economy grew 0.2% in the April-June period, down from 0.3% in the previous three months, according to preliminary data from the INSEE statistics agency.

That was just below a Reuters poll of 28 economists, which had an average estimate of 0.3%.

Household spending, the traditional motor of French growth, grew only 0.2%, slowing from 0.4% in the first quarter despite a more than 10 billion euro (£9.18 billion) package of measures launched by the government to boost purchasing power.

However, stronger business investment helped offset weaker consumer spending, growing 1.2% after 0.7% in the first quarter.

Exports grew 0.2% in the second quarter while imports were 0.1% higher, which meant foreign trade made no contribution to the overall growth rate.

While domestic demand added 0.4 percentage points to growth, companies running down their inventories rather than producing new goods knocked 0.2 percentage points off growth.

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

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