France posted its fastest economic growth rate in two years in the first three months of the year. but Germany slowed from the robust pace it rattled along at late last year, official data showed yesterday.
Quarterly French growth of 0.6 percent easily surpassed market expectations for a 0.4 percent expansion, but Europe’s largest economy disappointed by growing 0.3 percent, well below the 0.7 percent rate of the final quarter of last year.
The French government has predicted the economy would grow by at least 1 percent this year after eking out only 0.2 percent growth last year.
Photo: Bloomberg
Yesterday’s data suggested that forecast could be exceeded.
The strong quarter-on-quarter data was supported by consumer spending, corporate investment, industrial output and inventories, while exports slowed. The Bank of France has forecast growth will slow to 0.3 percent in the second quarter.
The German statistics office said public and private consumption, as well as investment in construction and equipment, had contributed positively to the economy in the first quarter. Trade was a drag as imports rose more sharply than exports.
While Germany has traditionally been an export-oriented economy, household spending is now the main growth driver as weakness in eurozone trading partners and further afield cuts foreign demand.
Spain reported 0.9 percent first-quarter growth two weeks ago, marking its fastest rate of expansion since 2007. That is unlikely to be bettered by many, or any, of its peers.
Spanish Prime Minister Mariano Rajoy’s government, which faces elections later this year, has raised its growth target for this year to 2.9 percent and said the 24 percent jobless rate, one of the biggest blots on the country’s turnaround, would fall more steeply than previously expected.
Finland’s GDP shrank 0.1 percent in the first quarter, preliminary data from the statistics office showed. The economy has contracted for three years in a row and has yet to return to 2008 output levels.
Meanwhile, the eurozone economy as a whole grew at its fastest rate for nearly two years during the first three months of the year.
The 0.4 percent increase in economic output was up from the 0.3 percent recorded in the previous quarter and was in line with expectations. It matches the rate recorded when it emerged from its longest-ever recession in the second quarter of 2013.
Still, the rate is likely to be a slight disappointment to many policymakers across the region considering the beneficial backdrop for the eurozone economy. The bloc has enjoyed a series of tail winds such as a fall in oil prices, which acts like a tax cut for businesses and consumers, and the export-boosting drop in the value of the euro.
To cap it all off, the European Central Bank launched its long-awaited 1.1 trillion-euro (US$1.2 trillion) monetary stimulus to keep a lid on interest rates in the markets.
The overall growth figure also masks some disappointments in specific countries, such as Greece’s return to recession, as the economy shrank 0.2 percent in the first three months.
Additional reporting by AP
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by