French Finance Minister hails “victory” as Q2 preliminary GDP beats forecasts

Employees are seen at a setting up design internet site, with a crane in the history, in Nantes, France, June 20, 2022. REUTERS/Stephane Mahe

PARIS, July 29 (Reuters) – French Finance Minister Bruno Le Maire hailed the country’s forecast-beating second quarter preliminary economic development as a “victory”, even as analysts mentioned fears about a economic downturn in Europe had been increasing because of to climbing inflation.

France, the euro zone’s 2nd-largest economy, posted preliminary gross domestic product or service (GDP) growth of .5% in the 2nd quarter.

The preliminary figures, produced by France’s INSEE data overall body, conquer forecasts in a Reuters poll which experienced predicted .2% development for the quarter.

“It is a victory for the French overall economy in difficult occasions,” Le Maire told a news convention, incorporating it intended France would meet the government’s goal for 2.5% advancement for 2022.

The French financial system obtained a improve from exports, included INSEE, whilst analysts explained in close proximity to-expression pressures remained in terms of inflation. Data on Friday confirmed that preliminary inflation for July stood at 6.8%.

France’s Significant Council on General public Finances (HCFP) also published a report on Friday which estimated that President Emmanuel Macron’s authorities was as well optimistic about the economic outlook. read through more

Le Maire refuted this, expressing the government’s economic expansion forecasts were “credible and really serious.”

“Development has been supported by amplified exports, on the other hand, the fundamental photograph is less constructive,” explained Sophie Lund-Yates, guide equity analyst at Hargreaves Lansdown.

“Family use fell in the quarter, possible a result of amplified fiscal prudence, when govt spending also came off the boil. The in general info set is of system a relief but this has performed small to fully erode recessionary fears,” she additional.

Rabobank also stated it nonetheless expected inflation to force the euro zone into a recession later on this 12 months.

“We however assume the euro zone economic system to enter a shallow economic downturn in the 2nd 50 % of 2022 to the initial 50 % of 2023, whilst the challenges of a critical contraction owing to an energy disaster have greater,” wrote Rabobank in a notice.

Reporting by Myriam Rivet, Michal Aleksandrowicz, Dominique Vidalon and Elizabeth Pineau
Modifying by Sudip Kar-Gupta

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