|France: GDP and its main components|
German GDP (gross national product) grew by only 0.1% in Q3 2014 while France managed to grew 0.3% in the third after a decline in the previous quarter, according to data published in Wiesbaden and Paris this morning.
Destatis, the federal statistics office, said that the German economy turned out to be stable in a difficult global economic environment. In the third quarter GDP rose 0.1% on the second quarter after seasonal adjustments and revisions which show that output had slightly decreased (–0.1%) in the second quarter of 2014 - the German economy had started the year with much momentum (+0.8% in the first quarter of 2014).
Positive contributions were made mainly by households, which considerably increased their final consumption expenditure in the third quarter of 2014, according to provisional calculations. Foreign trade also supported the German economy. The increase in exports was higher than that of imports. Consequently, the balance of exports and imports had a slightly positive effect on the GDP in a quarter-on-quarter comparison. By contrast, total gross fixed capital formation (investment) decreased. According to the provisional calculations, gross fixed capital formation especially in machinery and equipment in the third quarter was considerably down on the previous quarter (adjusted for price, seasonal and calendar variations). Gross fixed capital formation in construction decreased slightly. Also, inventories were markedly reduced.
In a year-on-year comparison, the German economy grew. The price-adjusted GDP in the third quarter of 2014 was up by 1.2% on the third quarter of 2013.
According to provisional calculations, the economic performance in the third quarter of 2014 was achieved by 42.9m persons in employment in the domestic territory, which was an increase of 384,000 or 0.9% on a year earlier.
In Paris INSEE (Institut National de la Statistique et des Études Économiques) reported that in Q3 2014, GDP in volume terms increased by 0.3%, after a slight decline in Q2 (–0.1%).
Households’ consumption expenditure increased moderately (+0.2% after +0.3%). General government expenditure increased by 0.8% in the last quarter (after +0.5%). Total gross fixed capital formation fell again (–0.6% after –0.8%).
GDP grew 0.2% in Q4 2013 and 0% in Q1 2014.
Final domestic demand (excluding inventory changes) contributed +0.2 points to GDP growth (after 0.1 points in Q2). Exports recovered (+0.5% after –0.1%) while imports accelerated (+1.1% after +0.3%). The foreign trade balance contributed negatively to activity (–0.2 points after –0.1 points in previous quarter), while changes in inventories contributed positively to GDP growth (+0.3 points after –0.1 points).
Philippe Waechter, chief economist at Natixis Asset Management in Paris, pointed out that the two main drivers of the growth were government spending, which expanded 0.8% during the quarter compared with 0.5% in the second; and a jump in inventories.
“The figure was surprising,” he told the FT. “But it means that there is still no strong momentum in growth for France and this issue is something that we still have to look at seriously.”
Eurostat will report on Eurozone GDP later thsi morning.