French growth at lower than expected 0.2%

The French economy grew by a smaller-than-expected 0.2 per cent in the first quarter of this year after expanding by 0

The French economy grew by a smaller-than-expected 0.2 per cent in the first quarter of this year after expanding by 0.7 per cent in the last quarter of 2004, data showed today.

National statistics office INSEE said it had changed the base year used for its calculation to 2000 from 1995.

INSEE said the French economy grew 2.1 per cent in 2004, down from a figure of 2.4 per cent it previously reported under its former base rate calculation. The statistics office previously said growth in the fourth quarter of 2004 was 0.9 per cent.

The downbeat data came after the Bank of France said this week French economic growth was set to accelerate in the second quarter of this year, with the central bank's April business survey pointing to growth of 0.5 per cent in the second quarter.

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But economists said there was danger of high unemployment - at a five-year high of 10.2 per cent - weighing on consumer spending, traditionally the main driver of growth in France.

Consumer spending in the first quarter rose 0.7 per cent, after an increase of 1.1 per cent in the final quarter of 2004, the GDP data showed today.