France holds pace as Spain sees fastest growth since 2017

Bloomberg

Economic growth held pace in France and accelerated in Spain to the fastest since 2017, easing pressure on the European Central Bank to ramp up stimulus for the euro region.
French consumer spending, boosted by French President Emmanuel Macron’s tax cuts after the Yellow Vest protests, buoyed the euro area’s second-largest economy enough in the first quarter to repeat its 0.3 percent growth at the end of 2018. Spanish expansion picked up to 0.7 percent, exceeding economists’ estimates.
Resilience in France and a pickup in Spain provides a brightening picture for the euro-area economy after a slowdown that was alarming enough to prompt the ECB to reactivate its stimulus stance. The region has struggled with a downturn in trade and a slump in manufacturing that has pushed confidence down to the lowest level since 2016 and already means Germany, the largest economy in the bloc, will trail France this year. The slowdown has left the ECB hoping for a rebound later in the second half to avoid having to add more stimulus beyond pledges it made in March to provide banks with more cheap loans and keep rates at record lows for longer.

STUTTERING RECOVERY
Data showed Austria’s economy matched France’s performance, holding pace with expansion of 0.3 percent in the first quarter, while Lithuania’s grew by 1 percent.
In contrast to Europe’s stuttering recovery, the US economy accelerated mark-edly in first quarter. China, however, showed some signs of weakness as gauge of manufacturing sector fell in April.
France’s relative strength comes in part from its relative weakness: with a smaller share of export markets, it’s buffeted less by trade tensions. Macron’s tax cuts have also proven fortuitous, coming at a time when demand in the rest of the euro area wilted.
Still, there were signs of France suffering from a trade slowdown. Export growth nearly ground to a halt in the first quarter after a surge at the end of 2018. Investment also slowed, rising only 0.3 percent, amid weak household demand.
French companies stepped up spending and reported resilient sales at the start of the year, even as many have cautioned that the outlook remains uncertain.