0.5% Growth in Q1 Gives French Economy a Boost

TOKYO, Japan - May 12, 2016 - PRLog -- The growth of the French economy by 0.5% can be attributed to the increase in spending by businesses and consumers. It is the first time ever since 2004 that investments have picked up at this rate and things are looking up. According to the INSEE, the 2 trillion Euro economy has been accelerated as business investments have increased causing stocks and exports to ease.

The steady growth in the first quarter shows that things are getting better and that there is more room for improvement. The consumers were the biggest contributors to the improved numbers. Overall consumer spending was up by 1.2% in just three months. Additionally, investments made in the manufacturing sector have gone up by 3.3%.

"The fact that the numbers are steadily going up is a good sign," said Derrick Noble, Vice President of Corporate trading at Fidea Group. "This is a stage where recovery can take place and the focus is not on consumption alone. The fixed investments in the region have helped clock growth with more gains forecasted in the next quarter."

He added that the economic slowdown, especially in the United States and Britain, is now more visible while France is slowly recovering from it. The GDP of France rose by 2.2% while the United States' GDP rose by a mere 0.5%.
Going by the forecast, expected Q1 growth for the French economy was 0.4%. The 0.1% advance came as a source of relief for the recovering economy. Even though exports have declined by around 0.2%, this weaker growth can be attributed to the current global economic climate as foreign trade has not contributed much to the economic growth of France in this quarter.

Accumulatively, the French economy has grown by about 3.5% when compared 10.2% and 7.3% of the United States and Britain, respectively.

Another interesting aspect to be considered is the fact that President Hollende's candidature for re-election in 2017 is dependent on whether he can live up to these numbers. If the 1.5% mark is reached or crossed, only then will he have a chance to win the elections. Economists suggest that on reaching the 1.5% mark the unemployment rates will begin to decline.

Large domestic demand that includes the consumer spending was able to add around 0.9 points to the GDP for the first quarter. A rise of 0.2 points in the last quarter was recorded since both exports and imports have borne the brunt of the global economic slowdown. Businesses have lost out on 0.2 points as a result of the cutbacks on exports when compared to the 0.5 points that were added during the previous quarter.

All in all, even though France took a direct hit as a result of recession, it is slowly coming out of the dark waters, which is an encouraging development for the current world economy.