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French economy grew 0.6 pct in first quarter, fastest in two years - Les Echos

Published 12/05/2015, 20:58
Updated 12/05/2015, 21:02
© Reuters.  French economy grew 0.6 pct in first quarter, fastest in two years - Les Echos

PARIS (Reuters) - The French economy grew by 0.6 percent in the first quarter of 2015, its fastest growth rate in two years, economic daily Les Echos reported without naming its sources.

The INSEE national statistics agency will publish first-quarter GDP data on Wednesday at 0530 GMT. The agency could not immediately be reached for comment.

With low oil prices and the euro exchange rate boosting consumer spending and industrial production, analysts polled by Reuters expect growth in the euro zone's second-largest economy to have picked up in the three months to March to a growth rate of 0.4 percent quarter-on-quarter.

If confirmed, the first-quarter growth reading would be the highest since 0.7 percent in the second quarter of 2013.

Consumer spending was up 1.6 percent over the first quarter, data released last month by INSEE statistics showed. Industrial production was the strongest in four years in the first quarter.

Adding to the improved outlook, an INSEE survey of industrial bosses released last week showed they expected to increase investment 7 percent this year, the most since 2011.

However, the number of people out of work in France rose again in March, showing that the gradual improvement in economic data has yet to translate into job market gains.

President Francois Hollande will be hoping the improving outlook boosts his record-low approval ratings. He has said he would not run for a second mandate in 2017 if unemployment has not dropped.

The government has forecast that the economy would grow by at least 1 percent this year after eking out growth of 0.4 percent for the last three years in a row.

That is in line with expectations from analysts polled by Reuters last month and slightly below the European Commission's latest 1.1 percent estimate. The European Commission then sees the growth rate speeding up to 1.7 percent in 2016.

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