The French economy has grown at its fastest pace in two years, with GDP rising at twice the pace managed by the UK in the beginning of the year, reports The Telegraph.
French GDP grew at 0.6 per cent in the first quarter, 50 per cent faster than economists had been expecting. At that pace, the economy increased in size twice as quickly as the UK’s over the same period.
Claus Vistesen, of Pantheon Macroeconomics, said that the GDP report was characterised by “strong consumer spending amid wild volatility in net trade and inventories”.
He added: “A 0.8 per cent quarterly increase in consumer spending following a 0.1 per cent rise in the fourth quarter was the main driver of the above consensus rise in French GDP.”
But while the GDP figures received a boost from greater consumption, investment declined for a seventh consecutive month, according to French statistics agency INSEE.
Maxime Sbaihi, an economist at Bloomberg, said that France would need to keep repeating its strong first quarter performance “to reverse the investment decline and finally start bringing down a record-high unemployment rate”.
Mr Vistesen said: “Overall, this is a strong GDP report but it is also distorted by a number of one-off factors. The increase in consumer spending is encouraging, but the underlying trend in private investment growth remains poor.”
Just last month economists described France as “lost in stagnation”, as surveys of its private sector showed the country lagging the eurozone’s other large members.
The French figures came as equivalent numbers for Germany showed a slowdown in Europe’s largest economy. German GDP rose by just 0.3pc in the first quarter, after growth of 0.7pc in the final three months of last year.
Statistics agency Destatis, which compiled the figures, said: “The German economy continued to grow at a slightly slower pace.”
Analysts had expected weaker German GDP figures, but had not appreciated the magnitude of the coming slowdown. Economists had pencilled in growth of 0.5pc for the period.