The French economy stagnated in the third quarter of 2004, according to new figures released by national statistics office INSEE.
The 0.0 per cent growth rate for the July-September period comes after the economy expanded 0.6 per cent both in the first and second quarters of the year.
Although INSEE previously reported growth of 0.1 percent in the third quarter, it said the fresh data would not cause it to cut its 2004 growth forecast of 2.1 percent.
"The revisions for the third quarter are very small," Michel Devilliers, head of forecasting at INSEE, said. "We see no reason to change our forecast."
"The few (items of) news we have on the fourth quarter, particularly on consumption, show that we will see a pick up," he added.
Economists noted that consumer spending during that time dropped for the first time in more than a year. But INSEE said the consumer spending component of GDP fell 0.2 percent in the third quarter, after expanding 1.0 and 0.4 percent respectively in the first and second quarters.
"Unemployment remains the main problem for the French economy. At close to 10 percent, there's no dynamism there. This is weighing on consumption," said Nicolas Claquin, economist at CCF.
Business investment also declined 1.1 per cent in the July-September period, its biggest drop since the final quarter of 2002, when it fell 1.5 per cent.
The weak growth data is bad news for France's conservative government, which forecast growth of 2.5 per cent for 2004 and 2005 in its budget for this year.
Finance Minister Herve Gaymard said last month France would be close to achieving this target. In a New Year's address last week, President Jacques Chirac said French economic policy was on the right road and Paris should resume cutting income tax and hold down state spending in 2005.
The GDP data came after other recent data provided a mixed picture on the state of the recovery in France. France's unemployment rate held steady at 9.9 percent in November, well above the euro zone average.