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France optimistic despite meagre growth figures

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France optimistic despite meagre growth figures
France's economy continues to struggle, with the latest figures giving no reason to rejoice. Photo: AFP
09:59 CET+01:00
France's economy minister put on a brave face on Friday despite the latest economic figures showing the French economy is struggling to register any growth, unlike their friends on the other side of the Rhine.
France's economy expanded by just 0.4 percent last year as investment slumped, official data showed on Friday, but the finance minister said he expected a "more definite upturn" in 2015. 
 
Total investment in France fell by 1.6 percent in 2014, a higher drop than the previous year, drawing concern for the eurozone's second largest economy.
   
Finance Minister Michel Sapin said the lacklustre growth was in line with expectations.
   
"It's obviously still too weak but conditions are met to allow a more definite upturn in activity in 2015," he told reporters.
   
The government has so far been unable to kickstart much-needed growth in a country beset by record unemployment.
 
Over the Rhine the German economy recorded a strong end of year performance with growth of 0.7 percent meaning the economy expanded by 1.6 percent in 2014.
 
"The German economy ended a volatile year on a very strong note," said ING DiBa economist Carsten Brzeski.   
 
President Francois Hollande has launched a two-pronged attack to tackle joblessness and push for growth.
   
The first is known as the Responsibility Pact, a series of tax cuts for businesses in return for job creation.
   
The second is a package of reforms aimed at opening up France's closed economy, including extending the number of Sundays per year when stores can open their doors.
   
Most economists believe that France needs a growth rate of around 1.5 percent to create jobs.
   
Sapin disputed this, saying just one percent growth -- the target for 2015 -- is needed.
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