FRANCE

摘要

GDP growth averaged 1.4% in y-o-y terms in Q1-Q3 2019, at a q-o-q pace of 0.3% for each three quarters. This was positive news considering the gilets jaunes protests dominating H1 2019, coupled with trade headwinds from the US-China tariff war. The latter has weighed on many EU countries' manufacturing sectors. French manufacturing production has also been affected, recording declines of -0.3% (q-o-q) in Q2 and -0.9% in Q3. Following a downwardly revised -1.4% (y-o-y) nosedive in August, September did see a +0.5% rebound in production, and October managed a further 0.1% advance. Moreover, the manufacturing PMI rose from 50.7 in October to 51.7 in November, firmly in positive territory. This was the fastest rise in 5 months as both new business and employment rose. The services PMI moderated but remained upbeat. However, political turbulence aimed squarely at French economic policy risks upending the positive outlook. US president Trump has threatened 100% duties on a range of French exports, in retaliation against French plans to tax digital service revenues (which would hit US internet giants). Tariffs could be implemented in early 2020, affecting some major French industries. Elsewhere, the government is facing widespread strike action from rail workers, air traffic controllers, teachers and other public servants, in protest against proposed changes to the public pensions system. Like the gilets jaunes movement, this risks gaining momentum and halting further reform attempts by the government.