French Economy Rebounds with 0.2% Q2 Growth, Averting Recession

• French economy grew 0.2% in Q2, avoiding recession.
• Domestic demand and exports primarily drove the rebound.
• Q2 growth met expectations, but year-on-year was slightly lower.

France’s economy expanded by 0.2% quarter-on-quarter in the second quarter, according to flash data, successfully avoiding a technical recession. This growth rate matched market expectations, reversing the -0.1% contraction recorded in the first quarter. The rebound was primarily driven by a recovery in domestic demand, including a 0.2% increase in household consumption and a rise in government spending to 0.4%. Furthermore, foreign trade contributed positively to the overall economic expansion. While the sequential growth met forecasts, the year-on-year GDP expansion of 0.7% slightly undershot the anticipated 0.8%.