France Retail Sales (ann. var. %)

Retail Sales in France

After flatlining in Q4, quarter-on-quarter GDP growth rebounded in Q1, expanding a mild 0.2%. Stronger growth in exports and declining imports meant foreign trade contributed positively to the reading. Meanwhile, despite increased inflation in the quarter, private spending growth was flat, improving from Q4’s contraction, likely aided by the unemployment rate falling to its lowest since 2008 in the quarter. That said, fixed investment contracted amid higher interest rates. Turning to Q2, economic activity growth should remain unchanged from Q1’s pace: In April–May, average consumer sentiment and average composite PMI improved from Q1, but average business confidence and the manufacturing PMI dipped in the same period, suggesting the stabilization in activity will mainly be services-driven.