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French economic system rebounds with file progress in third quarter

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France’s economic system grew at a file fee within the third quarter, rebounding from its pandemic-induced recession within the first half of the yr though output remained effectively under the extent of a yr in the past.

Gross home product rose 18.2 per cent within the third quarter from the earlier three months, but it surely was nonetheless 4.1 per cent under its degree on the finish of final yr, Insee, the nationwide statistics company stated on Friday. Economists had anticipated third-quarter progress of 15 per cent.

As compared, the US economy grew at a fee of seven.4 per cent within the third quarter, rebounding to inside 3.5 per cent of its degree on the finish of final yr, in line with information printed on Thursday.

The quicker than anticipated resurgence of French financial exercise within the three months to September mirrored the lifting of the nation’s first coronavirus lockdown. However it’s already being undermined by the current partial reimposition of restrictions after day by day coronavirus infections rose to new highs.

The most recent containment measures — involving journey restrictions, the shutting of borders to non-EU travellers and the closure of all bars and eating places — utilized from midnight on Thursday and can final at the least till the start of December. 

Separate information additionally printed on Friday confirmed that client spending on items fell unexpectedly in September, dropping 5.1 per cent from the earlier month, with clothes gross sales hit notably laborious.

The autumn contrasted with analysts’ expectations of continued progress and took French client spending again under its pre-pandemic ranges for the primary time since Could. Insee additionally stated that for the second consecutive month French client costs remained unchanged in October on an annual foundation.

“Even earlier than President Macron’s announcement of a brand new nationwide lockdown on Wednesday, which took impact at midnight final evening, new coronavirus restrictions have been undermining the restoration,” stated Andrew Kenningham, an economist at Capital Economics.

The eurozone’s second-largest economic system shrank nearly 19 per cent within the first half of the yr. The figures have been dragged down by a very sharp drop in exercise in its huge public sector, though this partly mirrored variations in how international locations measured the pandemic’s affect on civil servants.

Economists at Berenberg predicted that the brand new restrictions would trigger one other severe contraction within the French economic system within the remaining three months of this yr. “French GDP now seems to be set to say no considerably within the fourth quarter, presumably by 3 to 4 per cent,” they stated.

Insee said on Friday that French family spending had rebounded 17.3 per cent within the third quarter, leaving it 2.1 per cent under final yr’s degree. Public sector consumption regained all its misplaced floor and ended the quarter 0.4 per cent above final yr’s degree. French exports rose 23.2 per cent within the quarter, whereas imports have been up 16 per cent, it stated.

Nonetheless separate figures printed on Friday confirmed that in Germany retail gross sales fell by rather more than anticipated in September, fuelling fears that the nation’s client sector was shedding steam even earlier than the brand new semi-lockdown.

The quantity of retail gross sales in Germany fell 2.2 per cent in September in comparison with the earlier month, down from a 3.1 per cent growth in August, official information confirmed.

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