French fourth-quarter economic growth holds up in face of protests

March 26, 2019

PARIS (Reuters) – The French economy managed to keep up a steady pace of growth in the fourth quarter despite a series of violent anti-government protests that weighed on business and consumer confidence, official data showed on Tuesday.

The INSEE statistics agency said the euro zone’s second-biggest economy grew 0.3 percent in the three months to the end of December from the previous quarter, when it also grew at the same rate.

As a result the economy grew 1.6 percent over the course of last year, marginally better than the 1.5 percent flagged in a previous estimate.

Strong exports, as companies such as Airbus rushed to complete shipments before the end of the year, helped offset weak consumer spending.

Many stores in central Paris had to close on peak pre-holiday shopping days as the capital faced some of the worst rioting and vandalism in decades as the protests initially over the high cost of living spiraled out of control.

French households squirreled away cash, instead of spending money resulting from a surge in extra income at the end of last year, boosted by the scrapping of a payroll tax for unemployment insurance.

INSEE said the households’ real disposable income growth accelerated to 1.3 percent in the fourth quarter from 0.7 percent in the previous three months while the savings rate jumped to 15.2 percent from 14.3 percent.

Meanwhile, consumer spending growth was flat after growing 0.4 percent in the previous quarter.

In the corporate sector, investment growth fell to 0.3 percent from 1.7 percent in the third quarter as companies’ profit margins nudged up to 31.8 percent from 31.7 percent in the third quarter, INSEE said.

(Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta)

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