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French economic growth in 2008 unlikely to top 1 pct

PARIS - French economic growth is unlikely to be greater than 1 percent for 2008, according to a Reuters poll of eight analysts, with some analysts saying that the country could enter into a recession.

The average outcome from the eight analysts gives growth of 1.0 percent for 2008 and 1.1 percent for 2009.

At the end of July, a Reuters poll of 14 analysts gave an average forecast of 1.6 percent growth for 2008 and 1.4 percent for 2009.

The global credit crisis has led to fears of recession in the United States and other leading economies. A recession is usually defined as two successive quarters of negative growth.

Fears of a French recession grew earlier this month when official data showed that the country's economy unexpectedly shrank in the second quarter of 2008 as a weak rise in consumer spending failed to compensate for lower investment and foreign trade.

‘A technical recession in the French economy, that's to say two consecutive quarters of negative growth, is possible,’ said Credit Agricole economist Olivier Bizimana.

President Sarkozy's right-wing government has spoken of an economic slowdown, rather than a recession. The government has so far stuck to its forecast that 2008 growth will be at the lower end of a 1.7-2.0 percent range.

French Economy Minister Christine Lagarde has pointed towards falling oil prices and signs of slowing inflation as indications that the country's economy could improve towards the end of 2008.

Below is a poll of analyst forecasts.

20082009

Barclays Capital1.2%1.0%

BNP Paribas1.0%1.0%

C.Agricole1.0%1.3%

Deutsche Bank*0.6%0.9%

Euler-SFAC1.0%0.8%

Natixis1.1%1.0%

Xerfi1.1%1.3%

Asteres1.1%1.5%

AVERAGE1.0%1.1%

Although Deutsche Bank's current forecasts are for 2008 growth of 1.4 percent and 2009 growth of 0.7 percent, Deutsche has indicated that it is likely to cut those forecasts to 0.6 percent and 0.9 percent.