European economic statistics

France, Germany see growth at last

Article published on the 2009-08-13 Latest update 2009-08-13 15:50 TU

Economy Minister Christine Lagarde
(Photo: AFP)

France returned to economic growth between April and June, with Gross Domestic Product increasing by 0.3 per cent. Results from Europe’s largest economy, Germany, were also encouraging with 0.3 per cent growth.

Statistics released by Insee, the French national statistics agency, on Thursday show that the French economy has returned to growth for the first time since the first quarter of 2008.

“After four quarters of negative growth, France is finally coming out of the red,” Economy Minister Christine Lagarde told RTL radio. “France is clearly distinguishing itself from its neighbours."

But unemployment figures, due to be released later this month, are likely to be less positive. Unemployment currently stands at 9.1 per cent of the active working population and private sector job losses could hit 591,000 this year.

"When we talk about France we have to put it into perspective because we’re only talking about 0.3 per cent and that’s after four consecutive quarters of negative growth," Thierry Le Paon, from the CGT trade union told RFI.

"The growth is positive for two reasons, the first reason is because there was an improvement in the import/export balance. That’s to say that exports increased by more than 1 per cent and imports have decreased by 2.3 per cent," the trade unionist added.

In Germany, analysts had predicted a 0.2 per cent drop in GDP in the second quarter, but actual results were unexpected with a 0.3 per cent increase in the measure of growth. First quarter figures were also revised, with the original 3.8 per cent fall in GDP, being revised to 3.5 per cent, adding to a more encouraging outlook.

As in France, Germany had not seen positive figures since the first quarter of 2008, so these results help bolster Angela Merkel’s hopes in September’s general election.

But the forecasts for the eurozone show growth falling by 0.1 per cent, and growth across the entire 27-member European Union falling by 0.3 per cent.

Meanwhile, in Europe’s third largest economy, Britain, the situation was not as positive, with GDP falling by 0.8 per cent compared to the last quarter.