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France GDP growth surprises pundits

May 30, 2016

The French economy has expanded more than expected by analysts, the nation's statistics agency has said. Private consumption turned out to be a major driver of economic growth in the eurozone country.

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France building site
Image: Getty Images/Afp/Philippe Huguen

The eurozone's second-largest economy grew by 0.6 percent quarter-on-quarter in the first three months of the year, the French statistics agency Insee reported Monday in presenting its second estimate.

Year-on-year, France logged 1.4 percent growth in the first quarter, exceeding market experts' expectations.

Insee said the expansion was mainly attributable to a rise in domestic consumption, complemented by a surge in corporate and government investments.

Tourist agencies alarmed

At the same time, tourism felt the aftermath of the Paris terror attacks, with hotel bookings by Japanese visitors in the capital down 56 percent in the first quarter year on year. Chinese tourists had also been a major driver of growth in previous years, but their numbers also dropped, albeit less dramatically, by 13.9 percent in the first three months of the year.

The prospects for tourism to pick up in the near future didn't seem particularly rosy, operators said Monday, pointing to an outburst of social unrest across the country over the government's controversial labor reforms.

"There's still time to save the tourist season by putting an end to these blockades that are being shown the world over," the head of the Paris tourist board, Frederic Valletoux, said in a statement.

"It's the entire tourism and leisure network that is penalized," he added, emphasizing that some 500,000 employees depended on the sector in the Paris region alone.

hg/nz (AP, dpa, Reuters)