French economic recovery gains pace in fourth quarter of 2009

AFP - France's recovery gained pace in the last quarter of 2009, with unexpectedly strong growth of 0.6 percent despite a record recession of 2.2 percent for the year, official data showed Friday.

Over the year the drop in output due to global economic crisis was the worst in France since the end of World War II, but the 0.6-percent spurt of activity in the last quarter was stronger than officials had expected.

"It is a satisfying result," said Economy Minister Christine Lagarde on RMC radio, commenting on the figures from state statistics institute INSEE. "I said we would be back up and running at the end of the year."

The 2.2 percent contraction for 2009 overall was in line with forecasts.

France had crawled out of recession -- defined as two quarters of negative growth in a row -- in the second quarter last year, sooner than some of its big EU neighbours such as Britain.

President Nicolas Sarkozy has credited the government's stimulus measures with aiding recovery.

These included measures to boost France's auto industry -- one of its biggest sources of jobs and exports -- such as a reward scheme for drivers trading in their old cars, which is now being wound down.

The head of Italian car giant Fiat warned this week that the withdrawal of a similar scheme in Italy was likely to drag the auto market down in 2010.

Sarkozy's challenge now is to curb unemployment, which is near 10 percent, and to rein in the country's soaring public deficit.

INSEE's report on Friday said the rate of job losses in the last quarter of 2009 was "less marked than the previous quarter," with about 56,500 jobs lost in the fourth quarter and 412,000 last year overall.