French 2021 economic growth strongest in 52 years at 7%

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PARIS, Jan 28 (Reuters) – France posted its strongest growth in over five decades last year, hitting 7% as the euro zone’s second-biggest economy bounced back from the COVID-19 crisis faster than expected, data showed on Friday.

The strongest boom in a generation bolsters President Emmanuel Macron’s economic credentials less than three months from an April election in which he is widely expected to run for a second term.

The economy grew 0.7% in the final three months of the year after a particular strong third quarter when it grew 3.1%, the INSEE statistics agency said in a preliminary report.

Economists polled by Reuters had on average forecast fourth quarter growth of 0.5%.

The better-than-expected end to the year meant the economy grew 7% in 2021 as a whole, the strongest since 1969, after an 8% contraction in 2020 when strict coronavirus lockdowns were in force.

“The French economy has rebounded spectacularly and that’s erased the economic crisis,” Finance Minister Bruno Le Maire said on France 2 television.

“There are still some sectors that are still having trouble, like tourism and hotels, but most are recovering very strongly and that’s creating jobs.”

INSEE said that the economy had recovered to pre-crisis levels of activity in the third quarter as a vaccination campaign gained momentum and the government eased COVID-19 restrictions.

In the fourth quarter, growth was driven by consumer spending rising 0.4% even though it slowed from an exceptionally strong 5.6% jump the previous quarter as the economy re-opened after a lockdown.

Business investment rose 0.8% in the fourth quarter after gaining only 0.1% in the previous three months.

Growth was also boosted by companies replenishing depleted inventories, with stock-building adding 0.4 percentage points in the fourth quarter after representing a 0.7% drag in the third quarter.

(Reporting by Leigh Thomas; Editing by Kim Coghill and John Stonestreet)

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