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Draghi's "moderation" pulls her head in French slowdown



French economic growth slowed sharply in the first quarter, and although the weather was a factor, the slowdown may raise concerns about the broader outlook for the euro area.

Monetary region's second-largest economy has its start A series of Friday publications that could show growth have lost some of the spark of 2017. This is partly due to winter storms that hit the area earlier this year and hit factory production.

Mixed Bag

France, Spain and Austria launch euro area growth data

Source: National Statistics Agencies, Bloomberg Surveys


The signs of weakness and cautious inflation are reinforcing the cautiousness of some policymakers the European Central Bank ending quantitative easing. President Mario Draghi confirmed Thursday's latest figures, saying that the Eurozone is experiencing "some growth slowdown".

The French report showed that gross domestic product grew by 0.3 percent, less than half of the 0.7 percent of the last three months. There was better news from Spain and Austria, both up 0.7 percent over the same period. Germany, the largest economy in Europe, experienced a further decline in unemployment.

While the German labor data are good news, it also indicates staff shortages and capacity constraints that could limit growth and a warning from the Bundesbank

Even the disturbing weather probably played a role in the development of the entire Eurozone reporting on 2 May. The expansion there is likely to have cooled from 0.6 percent in the fourth quarter to 0.4 percent.

"The party The mood in German and European companies should be over for the time being," wrote Commerzbank economist Ralph Solveen in a note. "However, such a turnaround in the leading indicators does not necessarily mean the end of the recovery."

Beyond the euro area, two of the Seven economies will produce estimates of their performance in the three months to March. Growth in the US, the world's largest economy, is likely to have cooled, although the period has often been weak in recent years, while British expansion is also slowing, with the weather at least partially responsible.

Storms aside The slowdown also reflects that global growth is peaking, albeit at an elevated level. Many indicators have slipped from their highs in 2017 and the specter of a trade war between the US and China, the world's two largest economies, casts a shadow over the prospects.

That was the International Monetary Fund's warning last week, even as it left its forecasts unchanged for global growth of 3.9 percent this year and next.

Kit Juckes, a global currency strategist at Societe Generale SA, said the sentiment had turned "farther south" temporarily.

"Everywhere in the world has had a soft first quarter," he told Bloomberg Television. "I think it will be a quarter deceleration, and then spring will come in Spain, France, Germany, Britain and America."

In the eurozone, a strengthening currency could also act as a restraint. Against the dollar, it rose 11 percent last year, while a trade-weighted ratio of Deutsche Bank rose by 8 percent.

That puts exporters under pressure L & # 39; Oreal SA earlier this month first quarter sales decline on exchange rate effects despite the fastest sales growth in eight years

– With support from Mark Evans and Andre Tartar


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