French growth picked up in the final quarter of last year as consumer spending and firms' investment started to recover to bolster hopes for an economic recovery.
The euro zone's second largest economy grew 0.7 per cent in the final quarter of 2003, national statistics office INSEE said today, revising upwards earlier predictions of fourth quarter growth of 0.5 per cent.
INSEE also revised growth upwards for the entire year 2003 to 0.5 per cent from the 0.2 per cent it had previously reported.
"It's good news that the numbers have been revised upwards. It also sets an encouraging tone for 2004," said Mr Nicolas Claquin economist at CCF. "The French economy is progressively recovering, supported by good consumption."
The stronger growth numbers are positive news for the conservative government of Prime Minister Mr Jean-Pierre Raffarin, which suffered a regional election rout last month as voters protested against its job record and economic reforms.
INSEE revised February's jobless rate last week to 9.8 per cent from 9.6 per cent - well above the euro zone average.
"The remaining problem is employment, which is not set to improve greatly this year," Mr Claquin said. "France's high unemployment rate is one of the factors explaining why the French recovery lags behind those in other countries."
But some economists said consumers remained optimistic despite job worries, with consumer spending surging 3.3 per cent in January. However, data last week showed consumer spending fell a sharp 1.4 per cent month-on-month in March.