France skirts recession

PARIS: France's economy grew 0.1 per cent in the third quarter, the national statistics agency said Friday, just enough to permit the euro zone's second largest economy to avoid entering a recession.

France's gross domestic product shrank by 0.3 per cent in the second quarter, and statistics agency INSEE's initial forecast for the third quarter had been for a second consecutive quarterly contraction, one common definition of a recession.

But figures released Friday showed France's economy actually rebounded in the quarter from the previous period, thanks to higher consumer spending and corporate investment.

French Finance Minister Christine Lagarde called the performance "surprising" because economists and even the INSEE itself had been forecasting a slight decline in GDP for the third quarter.

In a radio interview on Friday Lagarde drew a distinction between France's third quarter economic growth and the contracting economies of Germany and Britain.

The figures released Friday are the INSEE's first estimate, and are subject to revision later.