The French economy surprised positively in the opening quarter of 2015 with GDP growth ticking up to 0.6% q/q. Private consumption was the main driver of growth, up by0.9% q/q. The rise in consumption it still fragile, however, especially since unemployment in France is historically high and is not expected to improve significantly before 2016. Surveys suggest that activity in the business sector is set to rebound following subdued performance in the first several months of 2015.
Following a subdued start to 2015, the corporate sector is expected to recover strongly, driven by the weaker euro, improving demand from abroad and higher domestic consumer spending. Services are now expanding at the fastest rate in 46 months, as indicated by PMI surveys, and manufacturing is expected to maintain the healthy rate of growth recorded in the opening months of 2015. The outlook for fixed investment depends to a large extent on the outcome of talks between Greece and its creditors. The continued slowdown in China would have a modest effect on French exports given the country’s small share in French exports.
Source : Cushman & Wakefield