FILE PHOTO: A general view shows the Eiffel Tower and the financial and business district in La Defense, west of Paris, France November 22, 2017. REUTERS/Gonzalo Fuentes/File Photo
January 30, 2019
PARIS (Reuters) – The French economy grew more than expected in the final quarter of last year as firm exports helped offset a slowdown in consumer spending in the face of anti-government protests, according to data from the INSEE official statistics agency.
The euro zone’s second-biggest economy grew 0.3 percent in the final quarter of 2018, the same rate registered in the previous three months, INSEE said.
The preliminary reading, which topped expectations for growth of only 0.1 percent in a Reuters poll of 32 economists, meant that the French economy grew 1.5 percent for all of 2018, short of the government’s forecast for 1.7 percent.
In the fourth quarter, household spending, traditionally the motor of French growth, slowed to a standstill after 0.4 percent growth in the previous three months as Paris saw the worst street violence since the 1968 student protests.
Meanwhile, business investment also slowed sharply, to growth of only 0.3 percent in the quarter from 1.7 percent in the previous quarter as business confidence collapsed amid unrest that left many stores boarding up shopfronts in Paris.
Yet an end of the year spurt in export shipments helped lift growth with export growth of 2.4 percent outpacing import growth of 1.6 percent.
As a result, foreign trade added 0.2 percentage points to overall growth, while business inventory drawdowns trimmed output back 0.1 percentage points.
(Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta)