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12 August 2011
French growth sputters to halt in 2nd quarter
finance.yahoo.com French economy posts zero growth in 2nd quarter as consumer spending, exports shrink
The French economy posted zero growth in the second quarter, national statistics agency INSEE said Friday. Government economists had forecast growth of around 0.2 percent in the period.
Growth in the first quarter was nearly 1 percent, but the a sudden reversal in consumer spending and stagnation by the country's exporters has caused the seizing up of the eurozone's second biggest economy.
The report Friday follows two days of frantic efforts by French officials to soothe investors' nerves after suggestions that the country could be the next major economy to lose its coveted triple-A credit rating.
France's finance minister took to the airwaves again Friday morning in a bid to put a positive spin on the weak second-quarter numbers.
"It's not a surprise that the second quarter is worse than the first, we anticipated this," Francois Baroin said in an interview on French radio station RTL. He said the government is sticking with its deficit reduction targets despite the lower growth.
The French central bank said this week that the economy will likely grow only 0.2 percent in the third quarter. The bank's monthly industrial survey showed corporate order books and factory utilization rates falling for the second month in a row in July.
