Reasons to remain optimistic about the growth outlook for France

Even though growth was quite weak in France in the first half of 2019 (0.3% in the first quarter; 0.3% in the second quarter) and the slowdown in global trade of course has led to a slowdown in French exports, we believe there are reasons to remain optimistic about the growth outlook for France: Corporate investment is growing rapidly, as the surveys have announced ; The growth in real household income is rapid, and the weak growth in consumption is explained by a sharp rise in the household savings rate. We believe this rise in the savings rate: Is temporary, due to the drastic rise in incomes and the decline in car purchases , and will correct in line with the increase in spending made possible by the increase in incomes; Is not permanent: for this rise to be permanent, it would either have to be triggered by Ricardian neutrality (rise in the savings rate due to an increase in the fiscal deficit), or by the income effect (households save more when interest rates are low to stabilise the income from savings), which we do not believe, as it makes an excessive assumption of household rationality .