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French economy unexpectedly contracts as exports slump in third quarter

Reuters

Oct 30 (Reuters) - The French economy ‌contracted 0.1% in the third quarter, missing analysts' expectations for slight growth, as lower ​exports ‌weighed on the euro zone's second-biggest economy, official preliminary ‌data showed on Friday.

Analysts polled by Reuters were expecting a 0.1% increase over the third quarter, after ‌no growth in the previous three months.

The economy was affected by a fall of 4.5 percentage points in exports, to -1.7%, mainly linked to a 9.1% decline in exports ⁠of transport equipment, with aerospace as the main ‌negative driver, versus 20.8% growth ⁠in the second quarter.

Gross fixed capital formation, national accounts’ ​main measure of investment, fell 0.6% in the third quarter, extending a 0.5% decline in the ​second, as construction and transport equipment investments dragged ​on ‌business spending.

France has been hit by a wave of protests ​in the final weeks of the quarter, ⁠which began with small student demonstrations ‌in suburban Paris ​in September to denounce school ​conditions and swiftly broadened into a wider protest against the government's economic policies.

Household consumption, however, continued to rise by 0.4% in the quarter, following a 0.2% ‌increase in the three months prior.

"Consumption of transport equipment is on the rise again, driven in particular by purchases ‌of ​electric vehicles," statistics office Insee said.

Energy consumption also rebounded, rising 1.2% after a 2.0% fall in the previous quarter, due to increased spending on electricity, Insee said.

(Reporting by Mathias ‌de Rozario in Gdansk, editing by Milla Nissi-Prussak)