• France edition
 
French economy 'could grow in third quarter'
Pierre Moscovici

French economy 'could grow in third quarter'

Published: 31 Oct 2012 17:41 GMT+01:00
Updated: 31 Oct 2012 17:41 GMT+01:00

Finance Minister Pierre Moscovici surprised markets on Wednesday by saying the French economy could post modest growth in the third quarter, a forecast considered as optimistic by analysts.

"I am reasonably confident on French growth," Moscovici said on BFM TV and RMC radio.

"I think that we could have in the third quarter, I hope, slightly positive growth."

The INSEE national statistics institute forecasts that the French economy will show no growth in period from July through September.

The French economy has not posted any quarter-on-quarter growth for the past three quarters.

But INSEE still forecasts that French growth domestic product (GDP) will rise by 0.2 percent this year.

Moscovici's optimism could be based on consumer spending, the biggest driver of the French economy, growing by 0.1 percent in September and by 0.2 percent in the third quarter, according to data released by INSEE on Wednesday.

Analysts are sceptical, however, noting that consumer and business confidence are at their lowest levels since the depths of the global economic crisis in 2009.

"With unemployment near a record high, banks cutting back their lending and fiscal austerity set to hit households soon, the consumer outlook appears bleak," said Jennifer McKeown, Senior European Economist at Capital Economics.

The French Economic Observatory (OFCE) forecasts a 0.1 percent drop in GDP in the third quarter.

"There is no growth engine that is active at the moment, and even if there is 0.1 percent growth (for the quarter), it won't be enough," said OFCE official Eric Hayer.

He said France would need quarterly growth of at least 0.4 percent to lower unemployment hovering around 10 percent.

The new Socialist government of President Francois Hollande is constrained by France's EU obligations to cut the public deficit to 3.0 percent of GDP from 4.5 percent this year.

The government plans to make €37 billion ($48 billion) in spending cuts and tax hikes to meet the target, although this will likely slow growth and increase unemployment.

Don't miss...X
Left Right

Your comments about this article

2012-11-02 03:02:27 by Eric
Socialist have no clue how an economy works. Just look at our great lord, Chairman Obama.
Today's headlines
Assad using chemical weapons: Hollande
French President Francois Hollande pictured on April 20th 2014. AFP Photo: Thomas Samson

Assad using chemical weapons: Hollande

France has "information" but no firm proof that Syrian President Bashar al-Assad's regime is still using chemical weapons, President Francois Hollande said Sunday. READ () »

PSG on course for double after cup triumph
PSG's galaxy of stars celebrate their French League Cup win over Lyon. AFP Photo/Franck Fife

PSG on course for double after cup triumph

Paris Saint-Germain won France's League Cup on Saturday, beating Lyon 2-1 in the final at the Stade de France to secure the first leg of a likely domestic double. READ () »

Freed journalists back on French soil
Francois Hollande welcomes French journalists Didier Francois, Edouard Elias, Nicolas Henin and Pierre Torres at the Villacoublay air base southwest of Paris. AFP Photo/Thomas Samson

Freed journalists back on French soil

Four French journalists taken hostage in Syria arrived home on Sunday to an emotional reunion with family and colleagues after spending 10 months in captivity in the world's most dangerous country for the media. READ () »

French reporters held captive in Syria set free
Didier Francois, Edouard Elias, Pierre Torres and Nicolas Henin. AFP Photo / Chris Huby/ Haytham Pictures/ Torres Family / Benoit Schaeffer

French reporters held captive in Syria set free

Four French journalists held captive in Syria for almost a year were free and "in good health" on Saturday, President Francois Hollande told AFP, saying they would be back in France within hours. READ () »

Euro hunt for French girl ends in her hometown
Europe-wide search for missing French girl ends in her hometown. Photo: AFP

Euro hunt for French girl ends in her hometown

A Europe-wide hunt for a missing 15-year-old French girl ended in her hometown on Friday where she was located with a 48-year-old family friend who was suspected of abducting her. Police believed the friend was suicidal. READ () »

French MP proposes puppy custody law
A French lawmaker wants puppies looked after in case of a divorce. Photo: Robbee/Flickr

French MP proposes puppy custody law

Who gets custody of a dog after a divorce? A French lawmaker has proposed a bill to create a legal framework to answer precisely that and other tricky questions surrounding pets. READ () »

Threat letter to French mosque praises far right
A mosque in the Paris suburbs has gotten a threat tied to the recent election of far-right National Front mayor. Photo: Miguel Medina/AFP

Threat letter to French mosque praises far right

After pork products turned up in the mailbox of a suburban Paris mosque along with a threatening letter praising the town's recently elected far-right National Front mayor, muslims are concerned about a "worrying" local shift. READ () »

'Slavery' protesters slash hundreds of Velib' tires
Hundreds of Velib' bike tires slashed in 'slavery' protest. Photo: Cyril Folliot/AFP

'Slavery' protesters slash hundreds of Velib' tires

Far-left activists slashed the tires on over 360 Velib’ bikes in Paris this week in protest of the ‘slave’ labour the programme’s operator uses to repair vandalized bikes. The vandals could themselves end up 'slave' labour. READ () »

New scandal means more bad news for president
France's president was smacked with his administration's latest embarrassing scandal. Photo: Alain Jocard/AFP

New scandal means more bad news for president

The latest blow to struggling President François Hollande came on Friday when a close aide quit over allegations he'd used taxpayer money to support a posh lifestyle and appeared to have breached conflict of interest barriers. READ () »

French bank bosses to explain 'indecent' pay
France's economy minister wants bank bosses to explain their "indecent" pay. Photo: Lionel Bonaventure/AFP

French bank bosses to explain 'indecent' pay

France’s economy minister, outraged by huge pay hikes the bosses of the country’s biggest banks have awarded themselves in the past year, called the chiefs to a meeting to “explain” their “indecent” pay. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
Society
VIDEO: Take a look inside Paris’s first luxury hotel for cats
Education
French parents are the most laidback about their kids' education. True?
Tech
What do French TV viewers complain about the most? Yes it's English
Business & Money
French tax declarations: The key points to remember
Gallery
French slang: Everyday words you need to know (but use cautiously)
National
Paris cops told to ‘purge’ Roma from posh neighbourhood
International
VIDEO: ‘Anti-French’ Cadillac ad sparks anger in France. See why.
Features
Buying property in France? Here's 10 things you need to think about
National
What will the future map of France look like? The answer lies within.
Politics
'The 27 French regions aren't the problem, it's the 36,000 towns'
Culture
Ex underage call girl Zahia picked to embody Marie Antoinette
Gallery
Buying a house in France? Ten things you need to think about
Advertisement:
National
France bans work emails after 6pm! Sadly it's not quite true.
Opinion
Reader Rants: Why don't the French do charity? Is it down to taxes?
Society
VIDEO: The Paris zoo is back but this time the animals are in charge
National
This will be the most expensive road in France - Only €1.66bn for 12km!
Society
Only in France? Gourmet pensioners party lands village in hot water
National
What's the worst thing to do when you realise you're on the wrong train?
From showers to kissing: Anglos tell Twitter what's weird about France
National
'A big quake will hit France and there will be casualties' - Scientist warns
Culture
After all the dozens of books is France still worth writing about?
Sponsored Article
Why it pays to avoid banks when making overseas transfers
Opinion
Paris or the suburbs - where would you live?
National
VIDEO: Walk the line - crossing the Seine on a tightrope
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se