(Bloomberg) — France’s economy rebounded at the start of 2023, defying fears that strikes over pension reform would drag down activity and reinforcing belief that Europe can continue to evade a recession.
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Gross domestic product rose 0.2% after stagnating in the final quarter of last year, thanks to a boost from trade as domestic growth drivers waned. The data kick off a busy morning for gross domestic product readings, culminating with the 20-nation euro zone at 11 a.m.
Three of the bloc’s four biggest member-states will also release inflation figures that could offer clues on how big an interest-rate hike the European Central Bank will opt for next. The euro area’s own consumer-price report is due just two days before the ECB’s May 4 decision.
Key Developments
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Euro-Area Economy Set to Dodge Recession, ECB’s Guindos Says
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Europe’s Economic Confidence Edges Higher on Consumer Optimism
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ECB to Slow Rate-Hike Pace Next Week Before Hitting Peak in July
German regional inflation (8:15 a.m.)
Inflation in the German state of North Rhine-Westphalia fell to 6.8% in April from 6.9% in March, indicating a national figure roughly in line with forecasts.
Consumer prices posted a monthly increase of 0.5%, according to the state statistics office in Dusseldorf.
North Rhine-Westphalia is the first German state to report April inflation readings and can often be the first signal of the trend in the overall figure, which the German statistics office will release later Friday.
IMF cautions central banks (8 a.m.)
Europe’s central banks should be wary of potential dangers ranging from more financial stress to a divergence in bond yields as they stay the course with further interest-rate hikes, according to the International Monetary Fund.
France’s Le Maire on GDP (7:50 a.m.)
Finance Minister Bruno Le Maire said the return to growth confirms the French economy’s resilience.
Even as households — the biggest driver of GDP — are showing signs of weakness, Le Maire said in a statement that foreign trade is “dynamic”’ and figures show industrial output is growing once more.
“Our fundamentals are holding up,” he said. “Businesses continue to invest and create jobs, bringing us closer to our goal of full employment.”
French GDP, consumer spending (7:30 a.m.)
Growth in the euro area’s second-largest economy was in line with the 0.2% median estimate in a Bloomberg survey of analysts. But statistics agency Insee revised down its estimate for the final three months of last year to zero from 0.1%.
The first-quarter expansion was supported by a boost from net trade as imports declined and exports remained dynamic, growing 1.1%.
The data show the unrest over President Emmanuel Macron’s raising of the pension age didn’t hobble the economy, with the Bank of France estimating that the hit was limited to a few sectors.
Yet there were signs of softer domestic demand with consumer spending failing to resume growth after contracting at the end of 2022 and total investment declining 0.2%
A separate release from statistics agency Insee showed consumer spending fell 1.3% in March from February as households cut back on food and manufactured-goods purchases. Economists polled by Bloomberg had expected a 0.5% increase.
Coming Up (all times CET)
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France inflation (8:45 a.m.)
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Spanish GDP, inflation (9 a.m.)
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Austria GDP (9 a.m.)
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German unemployment (9:55 a.m.)
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German GDP (10 a.m.)
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Portuguese GDP (10:30 a.m.)
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Slovenian inflation (10:30 a.m.)
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Euro-zone GDP (11 a.m.)
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Italian GDP (11 a.m.)
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ECB President Lagarde speaks after Eurogroup meeting (11:45 a.m.)
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Portuguese inflation (12 p.m.)
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German inflation (2 p.m.)
–With assistance from Giovanni Salzano, Jana Randow, Ainhoa Goyeneche, Alonso Soto, Alessandra Migliaccio, Marton Eder, Joao Lima, Jan Bratanic, Joel Rinneby, Barbara Sladkowska, Kristian Siedenburg and Alexander Weber.
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