France in GDP boost as German growth stalls
France’s economy grew by a stronger-than-expected 0.2 per cent in the fourth quarter from the previous three months as corporate investment picked up and domestic consumption remain solid, bringing growth for the year to 1.7 percent in line with the government’s forecast.
The INSEE national statistics office said that investment by non-financial corporations grew by 1.4 percent in the fourth quarter, after a contraction of 0.4 per cent in the third.
Household consumption, the motor of France’s 2 trillion euro economy, slowed slightly to 0.2 percent in the fourth quarter from 0.2 per cent in the third, but did not suffer as strong a decline as some economists had predicted.
Unemployment in France is running at a 12-year high with two months until a 22 April presidential first round vote. Europe’s second largest economy also posted a record trade deficit of nearly 70bn euros last year.
Imports declined by 1.2 per cent quarter-on-quarter, while exports grew by the same percentage, meaning that foreign trade had a positive contribution to final GDP of 0.7 percentage points of growth.
“Each of the three main components of the economy – foreign trade, household consumption and investment – had a positive contribution in the last quarter of 2011,” Finance Minister Francois Baroin said in a statement. “This strengthens the government’s forecast for 0.5 per cent (growth) this year.”
Meanwhile German gross domestic product contracted 0.2 per cent in the fourth quarter, a slowdown from an upwardly revised 0.6 percent in the July-September period, as trade and private consumption weighed on growth.
Preliminary data from the Federal Statistics Office also showed that growth compared to the same quarter a year earlier eased to 1.5 percent from an upwardly revised 2.6 percent in the previous quarter.
Quarterly growth had initially been reported at 0.5 percent for the third quarter, while annual growth had earlier stood at 2.5 percent.