French Economy Grows Again After Contraction in First Quarter

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The French economy, the second-largest in the eurozone, returned to growth in the second quarter. Helped by the winding down of the corona lockdown in the country, French consumers again spent a little more. Business investment also picked up, among other things.

 

A preliminary estimate by the French statistical office assumes 0.9 percent growth compared to a quarter earlier. As a result, the economy was even slightly better than economists on average had foreseen. However, in the first quarter, there was still a 0.1 percent contraction due to strict corona measures.

Last quarter, France was not yet free from the corona restrictions. In April, policies became even stricter again to curb an uptick in infection numbers and ease pressure on hospitals. But the economic impact of this was limited across the board. Compared to the second quarter of last year, when the economy was hit hard by the coronavirus, growth was almost 19 percent.

More large European countries will release figures on economic growth on Friday. In Spain, the economy also improved last quarter, after a contraction in the first quarter. France’s southern neighbour was a plus of 2.8 percent, which is also better than experts had expected. In the first quarter, the Spanish economy shrank by 0.4 percent.

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