France's GDP growth unexpectedly slowed in the second quarter

According to the report from Insee, in Q2 2019, GDP in volume terms decelerated slightly: +0.2% after +0.3%. Economists had expected a 0.3% increase.

Household consumption expenditures decelerated (+0.2% after +0.4%), while total gross fixed capital formation accelerated sharply (GFCF: +0.9% after +0.5%). Overall, final domestic demand excluding inventory changes accelerated slightly: it contributed 0.4 points to GDP growth, after 0.3 points in the previous quarter.

Imports remained almost stable in Q1 (+0.1% after +1.1%) and exports grew at the same pace than previously (+0.2%). All in all, foreign trade balance did not contribute to GDP growth: 0.0 points, after −0.3 points during the previous quarter. Changes in inventories contributed negatively to GDP growth (−0.2 points after +0.3 points).

Production of goods and services grew at almost the same pace as in the two previous quarters (+0.4% after +0.5% during three quarters). It was stable in goods (+0.0% after +0.5%), while it grew at the same pace in services (+0.5%). Output in manufactured goods fell back this quarter (−0.4% after +0.5%), mainly because production of refineries (one of them being in maintenance) and in transport equipment fell back. Production in construction decelerated (+0.3% after +0.6%).