INSEE : France to see Q3 growth of just 0.1%

The French national statistics agency INSEE on Friday revised downward its figure for the country's third quarter economic growth from 0.2 percent to 0.1 percent, which will make the government's full-year target harder to reach. INSEE said the third-quarter figure was revised lower following new data that showed weaker activity in the transport services sector in the three months from July through September. Overall investment and consumption in the services sector declined somewhat in the period. INSEE said earlier this month that it expected France's economy, the second biggest in the eurozone, to contract by 0.2 percent in the final quarter of 2012. It shrank by 0.1 percent on a quarterly basis in the three months from April through June. President Francois Hollande's Socialist government, which is struggling to reboot a stagnant economy and straighten out France's public finances at the same time, has forecast overall economic growth of 0.3 percent in 2012, but that now looks difficult to attain. Finance Minister Pierre Moscovici however ruled out any immediate change to the official outlook for growth of 0.8 percent in 2013. "Today, there is no reason to change the growth forecast," Moscovici told media at Orly airport south of Paris. "I stick with 0.8 percent" even though the situation is "difficult", he added. On Thursday, labour ministry figures showed that French unemployment had risen by 0.9 percent on a monthly basis in November to 3.13 million people, closing in on the all-time record of 3.2 million set in January 1997. A separate INSEE statement on Friday indicated that French household consumption jumped by 0.2 percent on a monthly basis in November owing to greater energy use, and revised a decline in October to -0.1 percent, a slight improvement from its initial estimate of -0.2 percent. "After stabilising in October, household energy consumption rebounded in November" by 2.7 percent, the institute said. It pointed to temperatures that were slightly below normal in northern parts of the country. Turning back to the growth outlook, INSEE said that if business activity was flat in the last three months of 2012, final figures would show growth for the entire year of just 0.1 percent. To reach the government's 0.3 percent target for 2012, economic activity would have to expand by 0.7 percent in the three months from October through December.