- Economy expands 0.6% Q/Q vs 0.5% in initial estimate
- Investment from non-financial corporations surges 2.4%
The French economy grew faster than originally estimated in the first quarter, lifted by improving corporate investment.
Growth accelerated to 0.6 percent, instead of the 0.5 percent estimated April 29, France’s statistics office Insee said Monday. That compares with a 0.4 percent increase in gross domestic product in the previous quarter. The economy expanded 1.4 percent from a year earlier.
The improved first quarter represents good news for President Francois Hollande as he battles unions to try to loosen French labor law and improve job creation. The Socialist president is repeatedly pointing out that growth is accelerating and unemployment is declining as he digs in his heels against a protest movement that is blocking refineries and ports.
Monday’s French GDP report showed that business investment jumped 2.4 percent in the quarter instead of the 1.6 percent originally estimated, helped by 40 billion euros ($46 billion) in tax cuts over the course of four years and a short-term tax break that allowed companies accelerated amortization in the current fiscal year. Consumer spending increased 1 percent, compared with the 1.2 percent initially reported.
There are signs that the recovery is starting to feed through into the labor market for the first time since Hollande took office four years ago. Jobless claims have fallen for two consecutive months, to their lowest in more than a year.