French economy unexpectedly contracts as exports slump in third quarter

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.