France’s economy improves in third quarter

France’s economy has returned to growth in the third quarter of this year, expanding by 0.3 per cent, after having earlier stalled, the national statistics agency said.

The slight slowdown was accentuated by a stalling Germany economy which also grew by a slower 0.3 percent, caught by falling demand from China and the Volkswagen pollution scandal.

“Even if eurozone GDP growth does come in around 0.4% quarter-on-quarter in the third quarter, the odds will continue to strongly favor the European Central Bank delivering more stimulative measures”, Howard Archer, Europe economist at IHS Global Insight, said ahead of Friday’s GDP figures.

Gross domestic product climbed 0.3% from the second quarter, when it grew 0.4%.

The worldwide Monetary Fund in its latest World Economic Outlook released in October, lowered its growth projections for Germany, while it retained the outlook for France.

Growth in the euro zone economy slowed in the third quarter from the second, according to new data from Eurostat, failing to meet expectations.

The country’s Federal Statistics Office said the economy had shown “continued moderate growth”.

“The (GDP) figure… confirms that we have left in 2015 the period of very weak growth that France had experienced since 2011”, said French Finance Minister Michel Sapin.

Still, the government expects strong private consumption and higher state spending on refugees to drive economic growth to 1.7 percent this year and 1.8 percent next. The lender forecast Germany to grow 1.5 percent this year and France to expand 1.2 percent.

Spain enjoyed a growth rate of 0.8%, but Greece’s economy contracted by 0.5%. Insee forecasts 1.1 per cent growth for 2015.

Consumer spending was the main driver behind the quarterly rise.

French President Francois Hollande’s Socialist government is trying to loosen up labor rules to encourage investment and reduce unemployment, which has stayed around 10 percent for years.