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French economy improving

January 10, 2014

According to preliminary figures released by the French central bank, the country’s recovery gained traction at the end of 2013. The Bank of France based its prediction of rising Q4 growth on higher factories output.

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Image: Reuters/Charles Platiau

France's economy had gained momentum towards the end of 2013 and was likely to post growth of 0.5 percent on the final quarter, the Bank of France said as it released preliminary fourth-quarter growth figures on Friday.

Ahead of official figures to be released next week, the French central bank said the rise came after a contraction of 0.1 percent in the third quarter and followed improving business sentiment in Europe's second-largest economy.

In November, French manufacturing output rose 1.3 percent, which was almost three times as high as expected by analysts. In addition, business sentiment improved 0.3 points on the European Commission's Economic Sentiment Indicator published on Thursday.

The rise is good news for French President Francois Hollande who is struggling with weak poll ratings due to high unemployment amid a shrinking economy.

France's urgent need for economic reform

Nevertheless, international ratings agency Standard & Poors lowered the rating for French sovereign debt in November over doubts that Hollande's policies could restore robust growth over the medium term. Moreover, the European Commission said it expected French growth to remain sluggish in 2014, forecasting a rate of 0.9 percent which is half as strong as is predicted for Germany.

uhe/pfd (Reuters, AP, AFP)