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French economy at walking pace as Spain sprints ahead

French economy at walking pace as Spain sprints ahead
By Euronews with Reuters
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French growth was 1.1 percent year-on-year in 2015 while Spain managed 3.2 percent growth.


France’s economy remains lacklustre. Growth for the final three months of last year was 0.2 percent slightly down from the previous quarter’s 0.3 percent.

Official statistics just released show household spending declined after the November attacks by Islamist militants in Paris but rebounded in December.

In addition business investment was strong in the eurozone’s second-biggest economy. Companies increased investment by 1.3 percent in the fourth quarter, reaching levels not seen since the start of the financial crisis in the first quarter of 2008.

The jump was the strongest sign yet that the Socialist government’s bet on 40 billion euros ($43.59 billion) in payroll tax cuts to fire up corporate investment may be beginning to pay off

For all of 2015, the French economy grew 1.1 percent. That was the fastest pace since 2011, but below the level economists say is necessary to reduce the jobless totals.

France is struggling to generate a recovery strong enough to make inroads against unemployment, running at an 18-year high of 10.6 percent.

Spain meanwhile showed steady growth.

GDP expanded by 0.8 percent between October and December from the previous three months, same as in the third quarter.

Growth for all of 2015 was 3.2 percent year on year – the fastest pace since before a severe downturn began eight years ago

The numbers add to hopes Spain’s recovery has enough momentum to withstand a period of political instability after inconclusive elections.

The election left Spain’s political landscape split between longstanding forces like the centre-right PP and its Socialist opponents, and newcomers such as anti-austerity Podemos, which has called for an end to spending cuts.

Wrangling between parties has yet to result in any coalition to govern, more than a month after the poll.

Unemployment also remains persistently high, with the jobless rate expected to hover at around 20 percent this year even in the best of scenarios.

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