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

Personnel are seen at a constructing design site, with a crane in the background, 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 were rising because of to increasing inflation.

France, the euro zone’s next-most significant overall economy, posted preliminary gross domestic merchandise (GDP) development of .5% in the 2nd quarter.

The preliminary figures, unveiled by France’s INSEE data human body, beat forecasts in a Reuters poll which experienced predicted .2% progress for the quarter.

“It can be a victory for the French overall economy in hard periods,” Le Maire told a information meeting, introducing it meant France would meet up with the government’s target for 2.5% expansion for 2022.

The French economic climate got a improve from exports, extra INSEE, though analysts reported in the vicinity of-time period pressures remained in conditions of inflation. Facts on Friday showed that preliminary inflation for July stood at 6.8%.

France’s Higher Council on General public Funds (HCFP) also printed a report on Friday which approximated that President Emmanuel Macron’s authorities was far too optimistic about the economic outlook. browse extra

Le Maire refuted this, indicating the government’s economic development forecasts were “credible and significant.”

“Advancement has been supported by amplified exports, even so, the underlying photo is considerably less favourable,” said Sophie Lund-Yates, direct equity analyst at Hargreaves Lansdown.

“House intake fell in the quarter, very likely a result of increased fiscal prudence, though federal government spending also arrived off the boil. The over-all data established is of program a reduction but this has accomplished minor to completely erode recessionary fears,” she additional.

Rabobank also said it nevertheless predicted inflation to force the euro zone into a recession later this yr.

“We nevertheless be expecting the euro zone financial system to enter a shallow recession in the 2nd fifty percent of 2022 to the very first 50 % of 2023, despite the fact that the threats of a extreme contraction because of to an energy disaster have improved,” wrote Rabobank in a note.

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

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