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Tuesday, 11 September, 2001, 10:51 GMT 11:51 UK
French economy slows
French butcher
Economists have been concerned over signs of a slowdown in household spending
The rate of growth in the French economy has slowed to its lowest rate in tow and a half years, official figures have revealed.

French economic output, or GDP, grew by only 0.3% in the April-to-June quarter, statistics office INSEE said.

For the moment there is absolutely no sign of a turnaround

Emmanuel Ferry, economist, Exane
In the first three months of the year, GDP grew at a revised 0.4%.

"This figure confirms that there was a slowdown but that France is doing better than its main partners in the eurozone," said Nicolas Claquin, an economist at CCF in Paris.

Recent figures showed Germany's GDP was unchanged in the second quarter compared with the first, while Italy saw GDP decline 0.1% over the same period.

Consumer confidence

One of the reasons given for the relative strength of the French economy of late has been a buoyant consumer sector.

But there are now signs that the French may be about to tighten their purses.

The GDP figures showed growth in household consumption slowing to only 0.3%, compared with growth of 1.2% in the first quarter.

Consumer confidence has been rattled by signs of rising unemployment.

The last set of jobs figures showed that unemployment rose in July for the second consecutive month to 8.9%.

Until June, the unemployment rate had not risen in France for nearly three years.

Future growth

The GDP data also showed that overall investment failed to grow at all during the second quarter.

Some analysts now think it could be a while before the French economy starts to pick up again.

"For the moment there is absolutely no sign of a turnaround," said Emmanuel Ferry, economist at Exane.

"The impact of the global slowdown on the French economy will continue to be felt in 2002."

Despite the bad news, Bank of France Governor Jean Claude Trichet said on Tuesday that growth could rise slightly in the fourth quarter to 0.4%.

But he added that he was "very cautious" on this forecast, and that all projections were under constant reviewed.

He also said that he saw the eurozone block GDP growing by 2% this year.

See also:

30 Aug 01 | Business
ECB cuts interest rates
31 Jul 01 | Business
French unemployment rises
24 Jul 01 | Business
French hit the shops again
12 Jul 01 | Business
French inflation steadies
03 Jul 01 | Business
French consumer confidence tumbles
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