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French third quarter economic growth picks up, but weaker than expected at 0.4 percent

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By Reuters
French third quarter economic growth picks up, but weaker than expected at 0.4 percent
FILE PHOTO: General view of the skyline of La Defense business district behind Paris landmark the Arc de Triomphe and the Champs Elysees Avenue, France, January 13, 2016. REUTERS/Charles Platiau/File Photo   -   Copyright  Charles Platiau(Reuters)

PARIS (Reuters) – French economic growth picked up in the third quarter, albeit not as much as expected despite a rebound in consumer spending and a stronger business investment, according to data from the INSEE official statistics agency.

The euro zone’s second-biggest economy grew 0.4 percent in the quarter, up from 0.2 percent in the previous three months, INSEE said on Tuesday in a first estimate for the July-September period.

However, the reading fell slightly short of an average estimate for 0.5 percent growth in a Reuters poll of 31 economists. <FRGDPP=ECI>

Household spending, traditionally the motor of French growth, grew 0.5 percent in the third quarter after falling 0.1 percent in the previous three months as strikes hit spending on transport in particular.

Meanwhile, business investment accelerated slightly to 1.4 percent in the quarter as firms stepped up outlays on digital technology while household investment, essentially new home purchases, declined in line with recent falls in housing starts.

Export growth outpaced that for imports, which meant that foreign trade added 0.1 percentage points to overall growth, while business inventory drawdowns subtracted 0.2 percentage points.

(Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta)