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France's economic growth slowing

By: EBR - Posted: Tuesday, November 16, 2004

France's economic growth slowing
France's economic growth slowing

France's economy has slowed by more than expected, dimming hopes for stronger eurozone economic growth.
Gross domestic product (GDP) rose by 0.1% in the three months through September, the statistical office said.
It was the weakest performance for more than a year, and was mainly down to a cooling in consumer spending.
Retail sales are a key economic driver and prime minister Jean-Pierre Raffarin has vowed to cut France's stubbornly high unemployment rate of 9.9%.

On Wednesday, he said he would push unemployment below 9% in 2005.
But Friday's growth figures suggested the French economy was struggling to create jobs.
"This is bad news," said Nicolas Claquin, an analyst at CCF Bank. "We were expecting a slowdown, but a little less marked than this."

Widespread
The French figures come a day after Germany, Europe's biggest economy, also reported a slowdown in the third quarter.
A separate report on Friday, meanwhile, showed a sudden slowing of growth in the eurozone, which is made up of the 12 countries that share a single currency.
France has been doing better than many of its European peers this year.
Growth has been quicker, lifted by consumers' willingness to continue spending and a resurgent auto industry.
Analysts, however, said it was now likely that France's 2004 GDP would not hit government targets of 2.5%.
The statistical office said that if growth was stagnant in the final three months of the year, GDP may be 2%.
That is likely have implications for France's attempts to bring its budget deficit back within the EU limit of 3% of GDP.
"France is falling back down to earth," said Marc Touati, an analyst at Natexis Banques Populaires. "It's a European problem...economic policy is not pragmatic enough."

Ambitions
European policy makers have recently criticised the region's pace of reform, saying it has not promoted growth.
The European Union has made no secret of its aim to overtake the US as the world's most important and powerful economy.
In 2000, it set out plans to make the region's labour markets more flexible, as well as create a more business-friendly environment.
A report by former Dutch Prime Minister Wim Kok said earlier this month that the strategy is not working.
Eurozone growth in the third quarter was 0.3%, prompting many economists to cut their annual forecasts for the region.
"It makes pretty dismal reading for the recovery prospects," said David Brown, an economist at Bear Stearns.
"The German recovery is dead in the water right now and the French recovery looks like it has hit a brick wall as well."

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