French Q2 Growth 0.2%

The French economy eked out meager growth in the second quarter as households saved extra cash gained from a rebound in purchasing power, crimping consumer spending, official data showed on Friday, Reuters reported. The INSEE statistics agency said the economy grew 0.2% in the three months to the end of June, unchanged from a previous estimate and the same rate as that seen in the first quarter. INSEE said households’ real gross disposable income rose 0.7% in the second quarter as inflation eased and the wealthy benefited from the scrapping of the wealth tax. However, households stashed away the extra cash as the savings rate rose to 14.3% in the second quarter from 13.7% in the first quarter, while consumer spending suffered a rare dip. INSEE had said in a previous growth estimate that consumer spending, which fell 0.1% in the second quarter, suffered due to transport strikes hitting travel spending. Unseasonably warm weather had also impacted energy spending. Meanwhile, corporate investment rose 1.2% although firms’ profit margins fell to 31.5% from 32% in the first quarter, as productivity slipped while wages rose slightly.