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29 Jan 2016
France: Q4 GDP estimate shows limited recovery in 2015 - ING
FXStreet (Delhi) – Julien Manceaux, Research Analyst at ING, notes that in France, INSEE’s first estimate of GDP growth showed this morning that the economy grew by 0.2% in Q4, as expected.
Key Quotes
“The details are yet to be confirmed but private consumption was not the main driver of the registered growth in the last quarter. Although Consumer confidence has remained high in the last months of the year, thanks to a slowdown in unemployment growth, low energy prices and the temporary nature of the Paris attacks shock, the first estimates show it contracting strongly in Q4.
Even if most business confidence indicators remained flat in the fourth quarter, the first estimates published this morning show that they were the main growth engine in Q4, a sign that recent fiscal measures are making their way despite low confidence. As the housing market is stabilizing, the 2 year old contraction in households’ investments could finally have come to an end.
Finally, external demand from Eurozone partners could have helped net exports in the fourth quarter. However, it remains to be seen if this was strong enough to compensate for strong import demand and the lower demand from the USD and GBP zones. The first estimates published this morning show that it will probably not be the case.
If these figures are confirmed next month, it would mean that last year’s hopes to see 2015 showing a stronger recovery of 1.5% will never materialize. Worse, this is now all we can hope for in 2016.
Looking ahead, we expect the labour market to gradually stabilize and reinforce confidence in coming months, mostly because of new measures announced to the Government. This means that the recovery is likely to continue to unfold in coming months, albeit at a slower pace than expected.”
Key Quotes
“The details are yet to be confirmed but private consumption was not the main driver of the registered growth in the last quarter. Although Consumer confidence has remained high in the last months of the year, thanks to a slowdown in unemployment growth, low energy prices and the temporary nature of the Paris attacks shock, the first estimates show it contracting strongly in Q4.
Even if most business confidence indicators remained flat in the fourth quarter, the first estimates published this morning show that they were the main growth engine in Q4, a sign that recent fiscal measures are making their way despite low confidence. As the housing market is stabilizing, the 2 year old contraction in households’ investments could finally have come to an end.
Finally, external demand from Eurozone partners could have helped net exports in the fourth quarter. However, it remains to be seen if this was strong enough to compensate for strong import demand and the lower demand from the USD and GBP zones. The first estimates published this morning show that it will probably not be the case.
If these figures are confirmed next month, it would mean that last year’s hopes to see 2015 showing a stronger recovery of 1.5% will never materialize. Worse, this is now all we can hope for in 2016.
Looking ahead, we expect the labour market to gradually stabilize and reinforce confidence in coming months, mostly because of new measures announced to the Government. This means that the recovery is likely to continue to unfold in coming months, albeit at a slower pace than expected.”