FRANCE

摘要

GDP growth flatlined in q-o-q terms for a third consecutive quarter in Q2. While the economy avoided falling into contractionary territory (unlike some Euro zone neighbours), the outturn is not upbeat. The y-o-y pace of activity has slowed from an already-muted 1.2% rate in Q4 2011 to only +0.3% in both Q1 and Q2 2012. Household consumption is usually the main driver of activity but it recorded a 0.2% (q-o-q) decline following growth of the same magnitude in Q1. Business investment, meanwhile, grew by 0.7% in Q2 and this compared favourably with a 1.4% decline in Q1 as firms recouped margins. However, it is unclear whether they will continue spending in an environment of tax increases and languishing domestic demand. Indeed, our panel's outlook for household spending has worsened on the back of deteriorating job fundamentals. Mainland unemployment rose to 9.6% in Q2 while joblessness in France and overseas territories hit 10.2%, surpassing the 3 million people-mark and hitting its highest level in 13 years.