France Grows Out of Recession in the Region of Hope: Current GDP in Europe

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(Bloomberg) — French economic growth accelerated in the first quarter — boosting the chances that the euro area can emerge from a mild recession.

Gross domestic product in the region’s second-largest economy rose 0.2% from the final three months of last year as domestic demand picked up. Analysts surveyed by Bloomberg had estimated a 0.1% expansion.

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A bumper day of data is expected to show the euro zone’s prospects are brightening after high inflation, rising interest rates and weak global demand saw output shrink in the second half of 2023. Helping revive the region is Germany, which is exiting a similar malaise led by its troubled industrial sector. The likely start of monetary easing by the European Central Bank should also provide a shot in the arm from June.

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Important developments

• Germany’s economy is showing signs of life, but industry is struggling
• German inflation rises again as energy support ends
• Irish GDP partially recovers with first glimpse of the start of the Eurozone

GDP Lithuania (8 a.m.)

The economy grew 0.8% in the first quarter as a drop in inflation to 0% from 20% a year earlier boosted household consumption, and manufacturing and transportation also improved.

After last year’s decline, GDP is slowly recovering thanks to increasing construction output, particularly infrastructure projects. Growth is expected to accelerate further in the second half of 2024 as consumer sentiment is better than anywhere else in the European Union, boosting retail sales and domestic consumption in the Baltic country.

France’s Le Maire (7:40 a.m.)

According to Finance Minister Bruno Le Maire, the improvement in GDP in the first quarter shows that President Emmanuel Macron’s strategy is paying off.

After missing budget deficit reduction targets partly due to weaker economic performance, some opposition parties are calling for a new financial plan that could trigger a vote of no confidence to topple the government. France is also under pressure from a series of reviews from credit rating firms, although both Moody’s Ratings and Fitch Ratings reiterated their views last week.

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“To those who would have you believe that our economy is at a standstill: the facts are stubborn: French growth is progressing,” Le Maire said in a statement to the press.

France GDP (7:30 a.m.)

Sluggish growth in France has created greater difficulties for Macron as disappointing tax revenues undermine his efforts to repair public finances and reduce unemployment.

Tuesday’s data gives the government cause for optimism as investment rebounded in the first quarter after a decline at the end of 2023.

Additionally, consumer spending growth accelerated over the same period. A separate release showed a 0.4% increase in March alone, while economists had expected only a 0.2% rise from February.

The Bank of France expects economic growth to accelerate further later this year and into 2025 as households benefit from disinflation. In the short term, however, there are few signs of improvement anytime soon as both consumer and business confidence fall.

Inflation in the Netherlands (6:30 a.m.)

Consumer price increases in the Netherlands slowed to 2.6% year-on-year in April – down from 3.1% in March.

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The result was in line with progress estimated by economists in a Bloomberg survey. The slowdown will encourage ECB policymakers to push for a reduction in borrowing costs.

Coming soon (all times CEST)

• Inflation in France (8:45 a.m.)
• Austria GDP, inflation (9 a.m.)
• Spain GDP (9am)
• Germany unemployment (9:55 a.m.)
• Italy GDP (10 a.m.)
• Germany GDP (10 a.m.)
• Portugal GDP, inflation (10:30 a.m.)
• Eurozone GDP, inflation (11 a.m.)
• Inflation in Italy (11 a.m.)

– With support from Ainhoa ​​​​Goyeneche, Giovanni Salzano, Alexander Weber, Mark Schroers, Joao Lima, Milda Seputyte, Marton Eder, Joel Rinneby, Kristian Siedenburg and Barbara Sladkowska.

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