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Macroeconomic outlook report: France

Second quarter of 2018

During the second quarter of 2018, France’s GDP registered a year-over-year growth rate of 1.67%, 0.52 p.p. lower than to the previous quarter. The main driver of the performance of GDP in 2Q18 was the deceleration of both the domestic and external demand. Regarding the labor market, the unemployment rate decreased by 0.10 p.p. with respect to the first quarter of the year, reaching 9.10%, while the growth rate of employment fell to 0.75%. The euro depreciated against the dollar, registering an exchange rate of 1.18 $/€. Finally, inflation registered a 1.87% rate.

Macroeconomic Overview

  • During the second quarter of the year, the French economy decreased its year-over-year growth rate by 0.52 p.p. with respect to the previous quarter, registering a rate of 1.67%.
  • This was due to the slowdown in domestic demand, after growth in private consumption, public consumption and investment declined. In addition, external demand contributed negatively to GDP growth, following a slowdown in exports.
  • Regarding the labor market, the unemployment rate decreased 0.10 p.p., to 9.10%; while the growth rate of employment decreased by 0.20 p.p., standing at 0.75%.
  • The euro depreciated against the US dollar by 0.05 dollars per euro compared to the previous quarter, registering an exchange rate of 1.18 $/€. This depreciation was due to the economic situation of the Eurozone countries, based on political instability, together with good economic data from the United States.
  • Inflation registered a rate of 1.87% in the second quarter of 2018, 0.50 p.p. above the rate registered in the previous quarter. The main determinant of the higher inflation during this quarter was the increase in the growth rates of food, tobacco, energy and manufactured products prices.

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© GMS Management Solutions, S.L., 2019. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.