France avoids recession, Germany grows by 0.2%

France’s economy narrowly avoided recession, growing slightly in the third quarter, according to official statistics.

France’s economy narrowly avoided recession, growing slightly in the third quarter, according to official statistics.

The eurozone has dodged recession during its three-year debt crisis, mainly thanks to the strength of its largest single economy, Germany.

Germany grew by 0.2% in the third quarter as confidence drains in the face of the turmoil afflicting large parts of the eurozone, mainly the southern economies of Greece, Spain, Italy and Portugal.

Five eurozone countries are already in recession, officially defined as two straight quarters of economic contraction.

The French economy has not recorded growth since the third quarter of last year and had been widely expected to start its slide into recession in the third quarter – technically defined as two consecutive quarters of negative gross domestic product.

Instead, Insee, the national statistics agency, said GDP rose 0.2% on an annual basis in the July-to-September period.

But the agency also revised down figures for the second quarter, saying the economy shrank 0.1%. It had previously said growth was stagnant, as it had been for the previous two quarters.

President Francois Hollande has promised to rein in massive government spending and reduce the deficit, largely by raising taxes.

But those measures have put a stranglehold on growth, and the country has watched unemployment tick steadily up as a raft of companies announced layoffs in recent months. The jobless rate now stands at 10.8%, according to European statistics.

The German economy, Europe’s largest, grew by 0.2% in the third quarter - slowing a little further as the continent struggles with its persistent debt crisis but performing slightly better than expected.

The figure for quarter-on-quarter growth, from the Federal Statistical Office, compared with an expansion of 0.3% in the second quarter and 0.5% in the first three months of this year.

It is a bit stronger than the 0.1% growth that was widely expected.

Germany enjoyed robust growth over the past two years, but the debt crisis has hit confidence and threatened to weigh on exports.

However, the statistical office said foreign demand made “positive contributions” to gross domestic product in the third quarter and private consumption was also higher.

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