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

Staff are observed 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 financial growth as a “victory”, even as analysts explained fears about a recession in Europe were being escalating due to increasing inflation.

France, the euro zone’s next-largest financial state, posted preliminary gross domestic item (GDP) development of .5% in the 2nd quarter.

The preliminary figures, launched by France’s INSEE statistics entire body, beat forecasts in a Reuters poll which had predicted .2% expansion for the quarter.

“It really is a victory for the French financial system in difficult situations,” Le Maire instructed a information convention, adding it meant France would fulfill the government’s aim for 2.5% expansion for 2022.

The French economic system got a improve from exports, extra INSEE, while analysts reported in the vicinity of-term pressures remained in phrases of inflation. Details on Friday confirmed that preliminary inflation for July stood at 6.8%.

France’s High Council on General public Finances (HCFP) also released a report on Friday which approximated that President Emmanuel Macron’s authorities was as well optimistic about the financial outlook. browse a lot more

Le Maire refuted this, stating the government’s financial advancement forecasts were “credible and critical.”

“Progress has been supported by greater exports, however, the fundamental image is much less constructive,” mentioned Sophie Lund-Yates, guide equity analyst at Hargreaves Lansdown.

“Family usage fell in the quarter, most likely a final result of increased fiscal prudence, while authorities shelling out also came off the boil. The general details set is of program a reduction but this has completed very little to totally erode recessionary fears,” she added.

Rabobank also stated it nonetheless anticipated inflation to force the euro zone into a economic downturn later this year.

“We continue to expect the euro zone financial state to enter a shallow recession in the next 50 percent of 2022 to the to start with half of 2023, though the risks of a significant contraction because of to an vitality disaster have enhanced,” wrote Rabobank in a observe.

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

Our Standards: The Thomson Reuters Belief Concepts.