France's GDP growth accelerates thanks to the Olympics

Economic growth in the second quarter of the year was 0.2 per cent. Insee observes that internal demand is 'showing signs of improvement, driven by a resurgence in household spending'. It increased by 0.5 per cent in the third quarter, with approximately half of this growth attributed to leisure and entertainment services connected to the Olympics and Paralympics.

The Olympics have assisted in counteracting significant issues in the economy. Production in the manufacturing industry is still decreasing, with a 0.1 per cent decline following a 0.3 per cent decrease in the second quarter. The oil refining sector is particularly affected, with a 0.8 per cent decrease after a 3.4 per cent increase in the previous quarter. Investment activity fell by 0.8% (with corporate investments dropping by 1.4%) as a result of Emmanuel Macron's decision to dissolve the National Assembly, causing dissatisfaction among investors.

France ended the quarter with a positive external trade balance. Nevertheless, as a result of imports decreasing more than exports (-0.7% compared to -0.5%), Insee anticipates no economic growth in the final quarter, maintaining annual GDP growth at 1.1% as predicted by the government.

source: ft.com