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Macroeconomic outlook report: France

First quarter of 2018

During the first quarter of 2018, France’s GDP registered a year-over-year growth rate of 2.19%, 0.63 p.p. lower than to the previous quarter. The main driver of this quarterly deceleration was the lower growth of domestic demand, especially due to the reduction of gross fixed capital formation. Regarding the labor market, the unemployment rate increased by 0.20 p.p. with respect to the fourth quarter of the year, reaching 9.20%, while the growth rate of employment rose to 0.97%. The euro appreciated against the dollar, registering an exchange rate of 1.23 $/€. Finally, inflation registered a 1.37% rate.

Macroeconomic Overview

  • During the first quarter of the year, the French economy decreased its year-over-year growth rate by 0.63 p.p. with respect to the previous quarter, registering a rate of 2.19%.
  • This quarterly performance was mainly driven by domestic demand, which experienced a deceleration of 1.15 p.p. when compared to the previous quarter, recording a y/y growth of 0.97% in 1Q18. This behavior was due to the reduction of 2.07 p.p. of gross fixed capital formation, especially because of the slowdown in corporate investment.
  • Regarding the labor market, the unemployment rate increased 0.20 p.p., up to 9.20%, while the growth rate of employment rose by 0.04 p.p., standing at 0.97%.
  • The euro appreciated against the US dollar by 0.05 dollars per euro compared to the previous quarter, registering an exchange rate of 1.23 $/€. This appreciation was due to the European economic situation, based on sustained growth, low inflation and the behavior of the foreign sector.
  • Inflation registered a rate of 1.37% in the first quarter of 2018, 0.20 p.p. above the rate registered in the previous quarter. This behavior was mainly explained by the increase of manufactured products, food and services prices, offsetting the lower growth of energy prices.

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© GMS Management Solutions, S.L., 2018. 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.