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French economy outpaces Britain as recovery is confirmed

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French economy outpaces Britain as recovery is confirmed
AFP
12:04 CET+01:00
The French economy clocked up solid growth in the third quarter, official data showed on Tuesday, suggesting that recovery in the eurozone's second-biggest economy remains on track.

The national statistics institute INSEE said in a statement that gross domestic product (GDP) expanded by 0.5 percent in the three months to September.

The French economy had already grown by 0.6 percent in the second quarter and 0.5 percent in the first quarter of this year.

That means that France's economy has grown for the fifth quarter in a row. Over the last 12 months France's economy has grown by 2.2 percent, the healthiest rate since 2011.

Reuters news agency had this to say: "Following the economy's performance over the first nine months, President Emmanuel Macron's government should have little trouble surpassing the 1.7% growth forecast it built its budget plans on."

And significantly that 12 month growth rate is higher than in the UK where the economy has grown by 1.5 percent over the last 12 months. Britain's economy expanded by 0.4 percent in the third quarter of 2017.

 

The third-quarter data are in line with the government's forecast for growth of 1.8 percent over the year as a whole.

Economic activity in the period from July to September was driven by a pick-up in household consumption and rising investment, INSEE said.

 

With the French economy having expanded at around a tepid 1.0 percent rate in recent years, an acceleration to 1.8 percent growth would represent a considerable improvement.

Business surveys have shown a new sense of optimism in the French economy since the election of Emmanuel Macron as president in June, and his government has pushed through a labour reform which it hopes will spur further activity.

Insee sees business investment accelerating to a 3.9 increase this year, from 3.4 percent in 2016.

Households are also expected to increase their investments by 5 percent this year, the highest rate since 2006.

Earlier this month Macron was also given some welcome news in the form of a steep drop in the unemployment rate.

READ ALSO: Brexit and Macron: Why the time was right to leave London for Paris

 

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