France confirms exit from recession but investment falls

PARIS (AFP) - France exited recession in the second quarter of the year with economic growth of 0.5 per cent, updated figures confirmed Friday, but investment shrank, raising concerns the recovery remains fragile.

The rebound for Europe's second-largest economy in the April-June period followed a six-month economic slide - though revised data released Friday said the gross domestic product (GDP) contraction in the first quarter was 0.1 per cent, instead of the 0.2 per cent initially announced.

But investment, which economists say is a key sign of the recovery's strength, fell 0.4 per cent in the second quarter, continuing its slide after a 1.0-per cent contraction in the first three months of the year, said national statistics agency INSEE.

Household purchasing power expanded by 0.4 per cent in the second quarter, though that pace was down from 0.8 per cent in the previous quarter, INSEE said.

Key drivers of the recovery included household consumption spending, which rose 0.4 per cent in the second quarter, and government spending, which rose 0.7 per cent.

The French government is predicting economic growth of 0.1 per cent for 2013.