"Good news": GDP up 0.3% in the second quarter, Eric Lombard welcomes "resilience" from businesses

This is better than expected. France's economic growth reached 0.3% in the second quarter, driven by inventories and a slight rebound in household consumption, INSEE announced on Wednesday in its first estimate for the period.

This moderate increase in gross domestic product (GDP) between April and June, in a very uncertain national and international context , is higher than the forecast of the National Institute of Statistics. It anticipated growth of 0.2% after +0.1% in the first quarter.

"This is really good news," Economy Minister Éric Lombard said on RTL this Wednesday morning. "It means that since the beginning of the year, growth has been slightly above 0.5%. Our target for the year is 0.7%. So we're on the right track," he added.

According to him, these positive figures show that French companies are "resisting" US customs duties, after having resisted "the consequences of censorship" and "pressure from China." They are "growing," praised the Bercy tenant. "This is a positive message and should encourage us to continue improving the efficiency of our businesses."

As at the beginning of the year, inventories drove growth, with a positive contribution of 0.5 points, after a +0.7 point in the first quarter. Inventories represent goods produced that have not yet been sold at the end of a given period: in this case, aeronautical and automotive equipment. A rise in inventories can mean that production is being carried out in anticipation of a boom in demand. Or, less favorably, that the manufactured products have not found buyers.

Excluding inventories, however, final domestic demand stagnated. A traditional pillar of growth, household consumption rebounded slightly, by 0.1% after a 0.3% decline in the first quarter, driven by increased consumption of food products. "This recovery can be explained in particular by the timing of the Easter holidays at the end of April and favorable weather in April and May," explained INSEE.

Households also consumed more services, while mild temperatures weighed on energy consumption, which fell by 2.4% (after +0.8%). In April and June, investments plunged into the red (-0.3% after -0.1%), penalized in particular by construction.

In an environment marked by the trade war started by the United States in April, the contribution of foreign trade to growth remained negative, at -0.2 points after -0.5 points, the slight rebound in exports having been offset by an acceleration in imports.