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French growth slows as ‘yellow vest’ protests take toll

French economic growth slumped in 2018 as consumer spending tapered off toward the end of the year, the victim of violent anti-government protests that kept many shoppers at home ahead of the holidays, statistics office INSEE said on Wednesday.

GDP expanded by just 1.5 per cent last year after the 2.3 per cent growth chalked up in the 2017 after Emmanuel Macron swept into the presidency with his pledge to revive the French economy through pro-business reforms.

The 2018 outcome fell short of the government’s growth target of 1.7 per cent and economists warn of gathering risks that could jeopardise a recovery in 2019.

INSEE said that consumer spending was stagnant in the fourth quarter after edging up 0.4 per cent in the previous three months, as the “yellow vest” protests over high fuel taxes and low living standards sparked widespread disruption.

Road blockades also kept goods and supplies from reaching stores and businesses, causing production bottlenecks and shortages.

Household spending slumped, falling 0.4 per cent in the final three months of the year, INSEE said, while growth in investment by companies slowed to 2.9 per cent from 4.7 per cent in the third quarter.

The government, which faces increasing difficulties keeping public spending under control and the budget deficit within EU limits, tried to see the glass as half-full rather than half-empty.

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