French economy expands strongly in Q4 2018, likely to grow significantly in Q1 2019

The French economic growth came in surprisingly strong in the fourth quarter of 2018. On a quarterly basis, the economy grew 0.3 percent, driven by the solid 2.4 percent rise in exports. Following a solid rise in the third quarter, corporate investments also continued to expand a bit. The stagnation in private consumption is expected to be greatly linked to one-off effects, noted Commerzbank in a research report. For instance, car sales had surged before the new emission test procedure came into force on 1 September.

There was a considerably counter movement in the fourth quarter. Moreover, the Christmas business suffered from the protests of the Yellow West. In the first quarter, private consumption might pick up again considerably. This is underpinned by the tax relief that came into effect at the start of the year and the expected normalization of demand for cars.

“We expect the French economy to grow by a respectable 0.4 percent compared with the final quarter. For 2019 as a whole, we expect growth of 1.3 percent after 1.5 percent in 2018”, added Commerzbank.

The data released gives cause for hope that the euro area economy is likely to have grown slightly more strongly in the fourth quarter than generally anticipated.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bullish at 68.7381, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 0.255164 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex