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French economy predicted to slow down significantly

PARIS - The French economy is slowing down and will likely show no growth for the third quarter of this year, the government's statistical office INSEE said on Friday.

‘France has been unaffected until now by the global (economic) slowdown, registering a robust 0.6 per cent rise in GDP in the first quarter,’ INSEE said.

‘But economic surveys are signalling a turnaround in the expectations of entrepreneurs in all sectors of the economy.

With household consumption and real estate investment both declining, ‘French economic growth is likely to be very weak for the rest of the year,’ INSEE said.

GDP growth is forecast to be at zero in the third quarter and to improve only slightly, to 0.2 per cent, in the fourth quarter of 2008.

For the entire year, INSEE foresees GDP to grow at a modest 1.6 per cent. The French government predicted that the economy would expand by 1.7 to 2 per cent in 2008.

French Finance Minister Christiane Lagarde called the INSEE projections ‘overly pessimistic.’