Paris, France (4E) – The French economy is expected to post better-than-estimate performance in 2013 than the government’s initial forecast as growth is set to resume in the fourth quarter after a flat third quarter, according to the national statistics institute Insee report released Thursday.
The euro area’s second biggest economy is predicted to expand by a revised up 0.2 percent pace in 2013, compared to Insee’s estimate in June of a 0.1 percent contraction.
Business climate is improving across all tracked sectors after a stronger than anticipated economy in the second quarter. Following two years of decline, companies are now expected to boost their investment by year-end, according to Insee.
The agency expects the economy to remain muted in the third quarter as energy production and manufacturing slipped after gaining in the previous three months. The economy is expected to bounce back with a 0.4 percent expansion in the fourth quarter.
Growth in the 17-nation euro zone is also expected to resume as business investment grows and national governments ease further budget cuts, Insee said. The common currency block is forecast to grow 0.1 percent in the third quarter and 0.3 percent in the fourth, said the official statistics agency.
Insee’s report is welcome news for French President Francois Hollande, who said that the economy has began its recovery over the summer after a period of stagnation and a recession at the start of the year.