French economic growth momentum likely to have remained subdued in Q2

The Bank of France released its latest business survey today. After the considerable deceleration in growth at the beginning of 2018, when French GDP grew just 0.3 percent sequentially, down from 0.7 percent in the fourth quarter, today’s survey implied that momentum continued to be weak at the beginning of the second quarter.

Indeed, the headline sectoral indices – for manufacturing, services and construction – all alleviated by one point to 102, 102 and 104 respectively. And while the survey hints that activity should continue to rise this quarter, overall GDP growth looks set to remain unimpressive compared to recent standards, noted Daiwa Capital Market Research in a report.

The Bank of France expects that the economic growth will remain unchanged at 0.3 percent in the second quarter. But as Governor Villeroy de Galhau pointed out that temporary factors, including the exception holiday schedule this month and the broad based strike activity, are possibly playing a rose to suppress the rate of growth.

“So, we expect growth to pick up slightly in Q3 to 0.4 percentQ/Q, a rate that will nevertheless still be down from the 0.6 percentQ/Q average rate of last year”, added Daiwa Capital Market Research.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bullish at 111.691, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -35.0163. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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