French official industrial ouput rebounds in July

9th September 2011, Comments 0 comments

French industrial production rebounded in July by 1.5 percent from activity in June when output contracted by 1.5 percent, the national statistics agency INSEE said on Friday.

Manufacturing production alone rose by 1.4 percent in July after shrinking by 1.8 percent in June, INSEE said.

The agency said that over the past three months, production across all industries grew by 0.9 percent and by 0.4 percent in manufacturing.

While the numbers were a nice surprise, they were "partly a technical rebound after very bad figures in June. Production is expected to keep slowing until the end of next year," Camille de Williencourt, analyst at Natixis said.

Meanwhile the budget ministry announced on Monday that the state deficit fell to 86.6 billion euros ($120 billion) at the end of July, down from 93.1 billion euros a year earlier.

The state budget is one component, together with welfare and local authority budgets, of the critical public budget limits in the European Union. In France overall welfare budgets are bigger than the central goverment budget.

France is introducing crisis measures to reduce its public deficit amid the eurozone debt crisis.

The state deficit figure on Friday, which included a writedown of more than one billion euros on distressed Greek debt held by France, fell because of a reduction of government spending in the period, the ministry said.

On Thursday, the public auditing body in France warned that the deficit on a key part of the welfare budget concerning mainly public health care, had reached a record of 30 billion euros, taking the main welfare deficit to 136 billion euros.

The head of the powerful auditing body, Didier Migaud, said that the deficits demonstrated a debt spiral "particularly dangerous for the legitimacy and sustainability of our welfare protection."

© 2011 AFP

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