French finance minister confirms 'end of recession'
Date created : Latest update :
French Finance Minister Pierre Moscovici (pictured) welcomed “the end of the recession in the French economy” on Wednesday, with a stronger-than-expected 0.5 percent quarter-on-quarter growth in April through June, its best result in two years.
France’s economy has jumped out of recession, posting stronger-than-expected 0.5 percent quarter-on-quarter growth in April through June, its best result in two years, official data released Wednesday showed.
Official figures confirm that the recession in the eurozone came to an end in the second quarter of the year.
Eurostat, the European Union’s statistics office, says the 17 European Union countries that use the eurozone saw their collective economic output grow by 0.3 percent in the April to June period from the previous quarter.
That was moderately better than the 0.2 percent anticipated in the markets, largely because of solid economic growth of 0.7 percent in Germany and a surprisingly strong 0.5 percent bounce-back in France.
Aside from Europe’s top two economies, there were signs of stabilization elsewhere, notably in Portugal, which grew 1.1 percent. There are even signs that the recession in Greece, the country at the heart of Europe’s debt crisis, may be easing too.
The return to growth in the second quarter followed 0.2 percent contractions in both the final quarter of last year and the first quarter of this year.
The expansion, which beat analyst forecasts, was largely thanks to improved domestic consumption, the national statistics agency INSEE said in a statement.
“This is the largest increase since the first quarter of 2011,” it added.
French Finance Minister Pierre Moscovici welcomed the rebound in gross domestic product, which he said “confirms the end of the recession in the French economy”.
“It amplifies the encouraging signs of recovery,” he said in a statement.
While various data has indicated that French economy is perking up, analysts had expected that the recovery would be more tepid.
After earlier predicting that the economy would contract by 0.1 percent overall this year, INSEE said it now expects growth of 0.1 percent for 2013, in line with government forecasts.
Data to be released later Wednesday is expected to show that the eurozone has edged out of its 18-month recession, with many analysts pencilling in 0.2 percent growth.
A return to sustained growth will be crucial for France’s efforts to bring its public spending deficit back under the EU ceiling of 3.0 percent.
Earlier this year Europe’s second-largest economy was given a two year-reprieve until 2015 to reach the 3.0 percent target by the EU.
But analysts say the country may still miss its new target of cutting it to 3.7 percent of GDP this year.
The exit from recession will also no doubt be welcome news to French President Francois Hollande, who was scoffed at by some commentators after claiming last month that the economic recovery had begun.