Wednesday, August 22, 2012

France: Weakening Growth With Some Underlying Problems

Let's now turn to France, to get an overview of their economy.

Overall, we see the same type of growth pattern as Germany; coming out of the recession France printed some OK numbers, but the economy has been slowing and is now just barely positive.

Industrial production's overall Y/O/Y growth has been negative for the entire year -- obviously not a good development.

Oddly enough, Y/O/Y percentage change in retail sales have been fairly decent.

There are two big deficit issues with the French economy: a budget deficit and current account deficit.  As a result, France must continually be attractive to foreign investors in order to continue operating in this manner.

Despite the above mentioned deficits, notice that government bond yields are actually very low -- currently coming in at just over 2%.

The unemployment rate is big issue for obvious reasons.

However, inflation appears to be under control.