The French economy, the second largest economy in the Euro-zone, appears to have rebounded in Q3, with a subtle 0.14 per cent GDP growth dependent mostly on corporate investment.

Christine Lagarde, French Minister of Economy, was eager to point out that a GDP growth in the third quarter stops the possibility of a technical recession in France, an important factor which may effect how investors view the region, as well as suggesting France may hold one of the stronger economies in Europe at the moment.

“In the third quarter, exports and imports were roughly balanced, it’s not there that we have growth or a decline. Consumption held up, in fact a bit better than in the second quarter, on the other hand company investments were much better than in the second quarter.”

Germany, Europe’s largest economy, shows a 0.5 per cent contraction in Q3, up from 0.4 per cent in Q2 - a factor that settles economist’s questions about recession. Germany’s last recession was in 2002, when formal GDP metrics asserted that Germany had confirmed a recession, but government statistics argued precisely the definition of recession, saying seasonally adjusted metrics suggest that negative growth had not been endured.

German consumer confidence is reportedly at record lows, due mostly to falling fuel prices and the prospect of further collapsing interest rates from Bundes Bank, the German central bank.

Bundes’ economic expectations report, said “The increase in the prices of energy sources has considerably restricted the real scope for income distribution in Germany. The country’s net energy costs could rise in value in 2008 by €23 billion on the year. In relation to nominal gross domestic product (GDP) this would signify an increase in energy-related costs of roughly 1 percentage point to 3¼%”

 Print This   Email This   Share/Save