French economic growth stagnates
Published by www.bbc.co.uk on Nov 10, 2006
Nov 10, 2006

Economic growth in France stagnated in the third quarter of the year, official figures show.

Statistics agency Insee reported zero growth between July and September - after a 1.2% expansion in the previous three months.

The abrupt slowdown has left analysts surprised and comes six months before presidential elections.

It also calls into question the government's full-year growth forecast for growth of between 2% and 2.5%.

Insee said it now expected growth in 2006 to be "close to 1.9%".

"We had a pause in growth unfortunately even though we had a very good figure in the second quarter," said Prime Minister Dominique de Villepin.

'Fragility'

Most analysts had expected further expansion in the third quarter - partly because of an improving jobs market.

However, there had been worries about a fall in consumer spending.

Economist Nicolas Bouzou, at economic consultancy Asteres, described the performance as being "like a blow with a club".

"After the exceptional growth in the second quarter everyone expected a lower figure, but this was without counting on the extreme fragility of the French economy, which is incapable of stringing together two consecutive quarters of strong growth," he said.

In the UK, economic growth ran at an annual rate of 2.6% in the third quarter, and was 3.8% in Spain. Germany is tipped to post 0.7% growth in the period.

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