French growth disappoints in 2005

Gross domestic product (GDP) rose by 0.2% in the fourth quarter, down from 0.7% in the previous three months, according to statistical office Insee.

For the year, GDP grew by 1.4%, compared with 2.1% in 2004.

Separate reports showed France's trade deficit tripled in 2005, and industrial production declined in December.

'Very erratic'

The figures are likely to cause concern as the government has made boosting growth one of its main priorities.

Analysts said that a number of factors, including record oil prices, civil unrest and a lack of reforms, have limited the country's efforts to boost growth and significantly cut its unemployment rate from the current 9.5% level.

A main cause of the slowdown in economic growth was a drop in car production, said Finance Minister Thierry Breton

The government had been expecting annual economic growth figures of between 1.5% and 2%, and quarterly expansion of between 0.5% and 0.6%.

Industrial production has continued to suffer - and Insee said that output contracted by 0.3% in December from November.

"The most disappointing is industrial production," said Jean-Louis Mourier, and ecnomist at Aurel Leven. "It's very erratic. Overall, we're seeing an industrial production that is very weak."

"This explains the disappointment on GDP growth," he added.

The trade shortfall was 26.46bn euros in 2005, more than three times the 8.284bn euros in 2004.

Exports have been increasing, but at a far slower rate than imports. In December, exports were 31.3bn euros, compared with 30.34bn a month earlier.

However, imports totaled 34.41bn euros from 33.4bn in November.

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