French GDP Growth Doubles In Q3

(RTTNews) - France's economic growth doubled in the third quarter as the Paris Olympic and Paralympic Games boosted consumption, official data revealed Wednesday.

Gross domestic product posted a quarterly growth of 0.4 percent after expanding 0.2 percent in the second quarter, first estimate from the statistical office INSEE showed. This was also better than economists' forecast of 0.3 percent.

On the expenditure-side, household consumption advanced 0.5 percent after remaining flat in the previous quarter. At the same time, growth in government spending held steady at 0.5 percent.

Meanwhile, the decline in gross fixed capital formation deepened to 0.8 percent from 0.1 percent.

Exports decreased 0.5 percent, offsetting the 0.5 percent increase in the preceding period. Imports declined more sharply by 0.7 percent after a 0.1 percent gain. As a result, the contribution of foreign trade to growth remained slightly positive at 0.1 points.

Finally, changes in inventories made a small 0.1 point contribution to GDP growth after a zero contribution in the second quarter.

Another data from INSEE showed that household spending growth weakened in September on lower food and energy consumption. Household consumption edged up 0.1 percent, slower than the 0.4 percent increase in August.

An increase of 1.8 percent in engineered goods consumption was offset by the 1.6 percent fall in food consumption and 0.3 percent drop in energy consumption.

The International Monetary Fund forecast the French economy to grow 1.1 percent each in 2024 and 2025.

Last week, rating agency Moody's downgraded the outlook on France's sovereign rating to 'negative' from 'stable' citing the increasing risk that the government will be unable to implement measures that would prevent sustained wider-than-expected budget deficits and a deterioration in debt affordability.