French economy growing, confidence trails

30th June 2004, Comments 0 comments

PARIS, June 30 (AFP) - The French economy grew by 0.8 percent in the first quarter of 2004 thanks to consumer spending and business investment, but consumer confidence remained weak, data from the national statistics institute Insee showed on Wednesday.

PARIS, June 30 (AFP) - The French economy grew by 0.8 percent in the first quarter of 2004 thanks to consumer spending and business investment, but consumer confidence remained weak, data from the national statistics institute Insee showed on Wednesday.

The economy grew by 0.6 percent in the last quarter of 2003, Insee said.

In the first three months of this year, consumer spending picked up by 0.9 percent on the heels of a 0.6-percent rise in the preceding quarter.

Business investment rose by a stable 0.8 percent, while household investment - mainly in real estate - also increased by 0.8 percent.

The trade picture was somewhat different however, with exports posting first quarter growth of 0.6 percent after a 1.0 percent rise in the previous quarter.

Imports rose by 1.6 percent, down from the 2.0-percent level in the last three months of 2003.

Meanwhile, French unemployment rose again in May, gaining 0.8 percent following an increase of 0.3 percent in April, figures released Wednesday by the labour ministry showed.

When calculated according to International Labour Organization standards, the French jobless rate was unchanged at 9.8 percent of the workforce.

On Tuesday, Prime Minister Jean-Pierre Raffarin had warned the jobless figures would be bad for a few more months before improving towards the end of the year on stronger-than-expected growth.

"By 2007 we will have a significant fall in unemployment," Raffarin forecast on Europe 1 radio, adding that his government aimed at ensuring growth was more widely shared among the population.

Finally, French household confidence was unchanged in May from April, with the indicator at minus 23, Insee said.

Households' opinions of their personal situation, now and in the future, were stable, while their perception of standard of living was slightly higher at present but slightly lower regarding the trend for the future.

The inclination to make major purchases increased by three points, owing in part to the traditional period of summer sales, analysts said.

The perception of unemployment developments was negative, but that of the ability to save money was slightly more positive.

Analyst Marc Touati of Natexis Banques Populaires underscored strong fears regarding unemployment, fueled he said by an economic recovery that not only did not create jobs, but also destroyed them.

"This is certainly a new French disease: growth exists statistically, but is absent in reality, i.e. is not seen in levels of employment, nor in business behaviour and even less in consumer confidence.

"The question is whether statistics will propagate reality, or vice versa."

© AFP

 

Subject: French news

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