Growth slowed in the second quarter. According to the initial figures released this Friday morning by Insee, the GDP indeed increased by 0.2% during this period, which is the same rate as in the first three months of the year.
While household consumption remains sluggish, business investment slightly picked up. Household consumption was hampered by transportation strikes.
This stagnation of growth in the second quarter now makes the government’s 2% target, set in the public finance stability program presented in April to the European Commission, increasingly difficult to achieve. Insee has already revised its forecasts downward and now expects a 1.7% GDP increase.
The Bank of France, anticipating a marked acceleration in the second half of the year, is slightly more optimistic for 2018, with a forecast of 1.8%. The Minister of Economy, Bruno Le Maire, has already indicated that the 2% target might be revised in the fall during the presentation of the 2019 finance bill.
On this matter, the International Monetary Fund has urged the government to continue its efforts in the next budget to reduce the deficit. Meanwhile, the IMF has downgraded its growth forecast for France this year to 1.8%.
