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French second-quarter growth revised up to 0.3%

French second-quarter growth revised up to 0.3%
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 -
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GONZALO FUENTES(Reuters)
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PARIS (Reuters) – France’s economy grew slightly faster than previously thought in the second quarter as strong business investment helped make up for soft consumer spending, official data showed on Thursday,

The euro zone’s second biggest economy grew 0.3% in the quarter, unchanged from the previous three months, the INSEE statistics agency said, revising the figure up from a provisional estimate of 0.2%

The relative resilience of the French economy contrasts sharply with the export-dependent German economy, which contracted 0.1% in the period as global trade tensions and the uncertainty over Britain’s exit from the European Union took their toll.

In France, consumer spending growth – traditionally the motor of the broader economy – slowed to 0.2% from 0.3% in the first quarter.

Higher inflation ate into consumers’ purchasing power, as households disposable income fell 0.2% after surging 0.8% in the first quarter due to a package of tax breaks and bonus schemes aimed at putting more money in the pockets of the poor.

The slower consumer spending was partially offset by a pick-up in business investment, which grew 0.9% after 0.6% in the first quarter as corporate profit margins increased to 33.1% – the highest since mid 2008 – from 32.6%.

Separately, INSEE said that consumer spending grew 0.4% in July from June, against economists’ expectations for an increase of 0.3%.

(Reporting by Leigh Thomas; editing by Richard Lough)

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