French economy slowed in Q2 2016

French economy slowed in Q2 2016, losing momentum for the first time since the beginning of 2012 against the backdrop of contraction in consumer spending. This represents a serious blow to the President Francois Hollande with the prospect of presidential elections in April next year. The third and final assessment for the period of the National Statistics Institute (INSEE) was revised downward to minus 0.1% on a quarterly basis, having previously INSEE said that growth remained sluggish. This is the first contraction since the second quarter of 2012.

The contraction of the second largest economy in the Eurozone in the second quarter came after the stable result of 0.7% growth for the period January-March 2016.

On year-on-year basis, the economy reported growth within the expected 1.3%, compared to expansion of 1.4% report during the previous quarter.

Consumer spending in France fell by 0.1% in Q2 2016. Earlier this week, French Finance Minister Michel Sapin said it keeps its forecast for economic growth of 1.5% this year and next.

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