France looks on track to report solid first quarter growth after an unexpected narrowing in its trade deficit and a steady rise in industrial output in March, but will be hard pressed to outshine Germany.
Analysts grew more confident that French growth would hold up in the face of a strong euro after the trade deficit shrank to 1.649 billion euros ($2.23 billion) from February's 2.354 billion euro shortfall, below a forecast of 2.7 billion euros. Their optimism was confirmed by a separate report on Thursday which showed industrial production rose 1.0 percent in the first quarter, thanks to a monthly increase of 0.2 percent in March and a revised gain of 1.2 percent in February.
"This is a clear improvement compared to the usual lacklustre industrial activity in France, even though this achievement is miles behind the German performance," said Dominique Barbet, senior economist at BNP Paribas in Paris.
"This supports our forecast of solid first quarter GDP growth, of 0.7 percent quarter-on-quarter. However, this is not sufficient for the future French finance minister to be as relaxed about the euro's strength as his German counterpart."
Finance Minister Thierry Breton said on Monday he expected French annualised growth of around 2.5-3.0 percent in the first two quarters of this year.
The improvement in France's trade deficit was partly due to a lower energy bill, with the energy deficit falling to 2.958 billion euros in March from 3.331 billion in February. A strike in France's southern Fos-Lavera oil hub may have played a role as it interrupted shipments being loaded and unloaded, according to the Trade Ministry.
Comments
Comments are closed.