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Last Updated: Thursday, 29 June 2006, 10:06 GMT 11:06 UK
France's economic growth picks up
Steel plant in France
France's economy is starting to fire on more cylinders
France's economic growth has accelerated in the first three months of this year, as consumers spent more and demand for exports increased.

Gross domestic product (GDP) rose 0.5% in the first quarter of 2006, up from 0.3% in the final three months of 2005, said national statistics office Insee.

Exports rose 2.9% in the quarter, and consumer prices increased by 0.8%.

The government, which has pledged to boost growth, said the data confirmed the country's recovery was on track.

Better times?

"The composition of this growth confirms the excellent dynamic of our economy," said France's Finance Minister Thierry Breton.

Mr Breton said that the improved economic environment should lead to a drop in the unemployment rate when figures come out on Friday.

France's economy has been slowly turning around, and the government has made it a priority to boost growth and cut the unemployment rate.

However, analysts said that any progress will be limited by a lack of reform in key areas, such as labour and pension costs and the amount of red tape that companies have to cut through.

The statistical office has forecast that the economy would grow by 2% in 2006, at the lower end of government estimates.

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