PARIS, July 30 (Bernama-dpa-AFX) -- France's economy grew faster than expected in the second quarter, driven by investment and exports, according to the first estimate from the statistical office INSEE on Tuesday, reported dpa-AFX news.
GDP expanded by 0.3 per cent sequentially, surpassing the forecasted 0.2 per cent growth. This rate matches the revised 0.3 per cent growth from the first quarter.
The expenditure side of GDP showed that final domestic demand made a positive contribution to GDP growth due to the slight rebound in gross fixed capital formation. Gross fixed capital formation edged up 0.1 per cent, reversing a 0.4 per cent fall in the first quarter.
At the same time, household consumption remained unchanged after a 0.1 per cent drop in the preceding period.
The quarterly growth in government expenditure halved to 0.3 per cent from 0.6 per cent in the prior period.
Foreign trade also made a positive contribution of 0.2 points to the growth as imports remained flat, while exports logged a dynamic 0.6 per cent expansion.
Finally, changes in inventories did not contribute to GDP growth again this quarter.
Other data from the statistical office showed that household spending decreased in June due to lower energy and food consumption. Household spending fell 0.5 per cent, in contrast to the 0.8 per cent increase in May. Consumption was forecast to drop 0.4 per cent.
Earlier in a note, the statistical office INSEE said the impact of the Paris Olympic and Paralympic Games on economic activity is expected to be around 0.3 GDP points in the third quarter.
Some of these positive effects have already been seen, especially in the construction sector, the INSEE noted.
As the support is likely to be non-recurring, a sharp slowdown in activity is expected in the fourth quarter.
The country is currently undergoing a political impasse after a snap parliamentary election.
Earlier this year, the government downgraded France's growth outlook to 1 per cent from 1.4 per cent.
The International Monetary Fund forecasts France's economy to grow 0.9 per cent this year and 1.3 per cent in 2025.
--BERNAMA-dpa-AFX
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