Growth spurt for French economy

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PARIS, France (AP) -- France's economy had a growth spurt in the fourth
quarter, according to figures published Friday, but its trade balance
lurched into deficit in 2004 as the strong euro helped imports outpace
exports.

A preliminary estimate by national statistics institute Insee said the
French economy grew between 0.7 percent and 0.8 percent in the three
months ending December 31 -- ahead of the 0.5 percent widely predicted
by economists.

That means full-year growth came in at about 2.3 percent -- above the
expected 2.2 percent but below the government's 2.5 percent forecast.
Finance Minister Herve Gaymard had trimmed that to "about 2.4 percent"
on Tuesday.

Gaymard also credited a fourth-quarter boom in consumer spending for
the growth surge.

But the euro's rise to record highs against the dollar late last year
meant that more of the spending went to foreign imports last year,
pushing France's trade balance to a 7.8 billion euros ($9.9 billion)
deficit compared with a 1.69 billion-euro surplus in 2003, according to
Finance Ministry figures.

The ministry said December's figures confirmed the full-year trend,
with the trade deficit expanding to 1.89 billion euros from 941 million
euros in November as exports slipped to 28.0 billion euros from 29.2
billion euros.

Through most of 2004, French companies complained that the strength of
the euro against other currencies was making export business difficult.

French exports nevertheless rose 5.6 percent to 341 billion euros,
Foreign Trade Minister Francois Loos said. But imports jumped 8.6
percent to 349 billion euros.

The deficit in France contrasts sharply with the position in Germany.
The euro zone's biggest economy earlier reported a 157 billion euros
trade surplus for 2004, making it likely to remain the world's biggest
net exporter for the second straight year.

Germany's economy grew 1.7 percent in 2004, its federal statistics
office said last month. Italy publishes its first fourth-quarter growth
estimate on February 15, with economists expecting a 1.2 percent
expansion for the full year.


 
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