PARIS: French economic growth held steady as Emmanuel Macron was elected new president in May, expanding 0.5 per cent in the second quarter of the year. Quarterly GDP growth in the eurozone’s second largest economy has now remained at 0.5 per cent since the end of 2016. The reading came in line with forecasts, while year on year growth accelerated sharply from 1.1 per cent to 1.8 per cent – the highest level since 2011 (forecast: 1.6 per cent). The official figures will be a boon for president Macron who has vowed to overhaul the French economy after years of lagging behind its major eurozone rival, Germany.
Unemployment in France is now at its lowest since the eurozone crisis, inflation has been tamed, and business surveys are revealing the best confidence levels in a decade. Mr Macron’s economic plans include major changes to the French labour market, allowing employers to offer more flexible wage bargaining. He is also promising to reduce corporate tax rates and is aiming to bring down the country’s troublesome budget deficit.
By comparison, the UK grew just 0.3 per cent in the three months to June, as high inflation has softened consumer spending a year on from the Brexit vote. Exports help drive France’s GDP performance in the second quarter, leaping back into growth of 3.1 per cent after a 0.7 per cent contraction in the previous quarter, according to Insee. Imports however slipped to 0.2 per cent growth from 1.2 per cent and household spending inched up slightly (0.3 per cent from 0.1 per cent).
