International Business News – According to comprehensive French media reports, according to a report released by Eurostat on Friday, the euro zone economy grew by 0.7% in the second quarter, higher than the expected 0.2%. Inflation rose to 8.9% in July, up from 8.6% in June and market expectations of 8.7%. The main reason for the stronger-than-expected economic growth was that tourism greatly boosted the economies of southern European countries. The economies of Spain, Italy and France grew by 1.1%, 1% and 0.5% respectively.
However, the optimistic situation in the second quarter cannot hide the worries about the future. On the one hand, the economic growth of Germany, the EU’s economic locomotive, has returned to zero in the second quarter. Foreign trade has suffered multiple impacts from the new crown pneumonia epidemic, supply chain disruptions, Ukraine crisis and energy crisis, and there is a high probability that it will fall into recession in the next quarter. On the other hand, the energy crisis, high inflation, and the specter of recession will continue to hang over the euro area, production may contract, and the household confidence index is also at an all-time low.
According to the report of the French National Institute for Statistics and Economic Research, after shrinking by 0.2% in the first quarter, France ushered in a growth of 0.5% in the second quarter, higher than the expected 0.2%; it is expected to grow by 2.5% for the whole year. The growth in the second quarter was mainly due to the return of foreign tourists, which drove the growth of hotels, catering and transportation services, and foreign trade contributed 0.4 percentage points to GDP. Household consumption continued to weigh on economic growth, shrinking 0.2% in the second quarter after falling 1.5% in the first quarter.
At the same time, the downside risk of the French economy is still relatively large, and uncertain factors such as natural gas shortage, economic contraction in the United States, and China’s epidemic prevention and control measures are accumulating. Experts believe that there will be a risk of stagflation in France in the next few months, and the government’s 1.4% growth target for 2023 will be difficult to achieve. And if Russia dies, France will inevitably fall into recession next year.