French growth revised up to 0.6% in first quarter

24th June 2015, Comments 0 comments

France's economy grew by 0.6 percent in the first quarter of this year, the national statistics agency Insee said Wednesday, revising up its initial estimate by a tenth of a percentage point.

It also revised up gross domestic product (GDP) growth to 0.1 percent in the final quarter of last year from its previous calculation of no growth.

In a particularly encouraging sign, investment by companies rose by 0.3 percent during the quarter.

Business investment has been considered the weak link in the recovery across most of Europe.

France has been lowering taxes on businesses to encourage investment and employment, and the Insee statistics showed that their profit rate increased to 31.1 percent in the first quarter -- its highest level since the beginning of 2011.

Finance Minister Michel Sapin said the improved profit margin should spur companies "to invest and hire".

Insee data showed that foreign trade made a negative 0.5 percentage point contribution to GDP growth in the first quarter, after a positive 0.2 point increase in the final quarter of 2014.

Household consumption made a positive 0.5 percentage point increase.

Sapin said the latest Insee data strengthened the government's forecast of 1.0 percent economic growth this year.

Other economists are already expecting higher growth, with forecasts averaging around 1.2 percent, which is also Insee's forecast.

The stronger growth hasn't helped reduce the public deficit, which came in at 4.0 percent of GDP in the first quarter, compared to 3.9 percent in the last quarter of 2014.

France intends to push down the deficit to 3.8 percent overall in 2015.

© 2015 AFP

0 Comments To This Article