French economy returns to growth in third quarter

The French economy returned to growth in the third quarter, as consumers were buoyed by lower prices and borrowing costs.

According to official data released on Friday, France’s gross domestic product expanded 0.3% quarter-on-quarter in the three months to the end of September, compared with a flat reading in the previous quarter and in line with analysts’ expectations.

On a year-on-year basis, the GDP in the Eurozone’s second largest economy rose 1.2%, beating expectations for a 1.1% gain and edging higher than the 1.1% advance registered in the previous quarter.

Growth in French business investment accelerated in the period, while a two-year decline in household investment slowed down and consumer spending rose 0.3%.

“This morning’s figure confirms that in 2015 we have exited the period of weak growth that France had been in since the end of 2011,” said French Finance Minister Michel Sapin.

French authorities expect the economy to increase at least 1.1% this year and 1.5% in the next 12 months, which would mark the strongest year of growth since François Hollande became president in 2012.

However, economists indicated growth remained moderate and the French economy is not entirely out of the doldrums.

“The GDP data indicate that France's growth remains moderate, but nonetheless fragile,” said analysts at Barclays.

“However, it is gradually rebalancing thanks to improving momentum in investment.

“Positive industrial production carryover, and well-oriented business and consumer surveys suggest growth momentum will continue in the next few quarters.”