French Q2 growth revised up to 1.1%

The French economy rebounded slightly more strongly than first thought in the second quarter as consumer spending recovered after a coronavirus lockdown, the INSEE official statistics agency said on Tuesday.

The euro zone’s second-biggest economy grew 1.1% in the three months to the end of June after showing no growth the previous three months, INSEE said, revising the second quarter rate up from 0.9%.

The increase leaves the economy 3.2% below pre-crisis levels reached at the end of 2019, a gap the government expects to be closed before the end of this year.

Activity recovered quickly in the second half of the second quarter as the economy emerged from lockdown and a vaccination programme gained speed.

Consumer spending, the traditional motor behind the French economy, rose 1.0% in the second quarter while business investment was up 1.9%, INSEE said.

However, consumer spending got off to a soft start in the third quarter with monthly data for July from INSEE showing that it fell 2.2% from June, more than the 0.5% fall expected on average in a Reuters poll of economists’ expectations.

The government expects the economy to grow 6% this year after contracting 8.0% last year.