The French economy stagnated in the third quarter of 2006, slowing far more sharply than expected from the second quarter's blistering pace of growth, data showed this morning.
National statistics office INSEE's growth estimate for the euro zone's second biggest economy was well below economists' consensus forecast of 0.5 per cent. "It is not good," said Olivier Gasnier, economist at Societe Generale in Paris.
INSEE said French growth in the second quarter was an unrevised 1.2 per cent and calculated that the economy would grow by at least 1.9 per cent in the full year.
The government has predicted that full-year growth would be between 2 and 2.5 per cent.
INSEE's report was the first estimate of growth from one of the bigger euro zone economies, giving an indication of how it weathered headwinds from abroad as the US economy slowed.
While the early growth estimate did not include a breakdown, separate figures fitted with the picture painted by data in recent months - that consumer spending, rather than trade or industrial output, was the main driving force for growth.
INSEE data showed industrial production unexpectedly fell 0.9 per cent in September, defying economists' expectations of an increase of 0.4 per cent.
The Customs Office reported the trade deficit narrowed to €1.348 billion in September from a revised €2.872 billion in August but the deficit for the year to date remained wider than in the same period a year earlier.