U.S. rebound questioned, French growth to slow: Lagarde (Reuters)
11.09.2008 14:25 Business
"I hope that U.S. growth will rebound. What is sure is that it rebounded in the second quarter," Lagarde told France Inter radio.
"Let's wait for the third quarter number. I am not convinced of the durability of this rebound," she said.
Turning to the domestic economy, Lagarde said there was no need to speak of recession given gross domestic product (GDP) was likely to expand at a rate of around one percent in 2008, an estimate revealed by the government earlier this month.
"We still have growth so I would like to somewhat kill the idea that we will be in a black hole and a recession -- we are in a period of slowing growth," she said.
She said the domestic property market had shown signs of price softening and the number of housing starts had declined, but the situation in France was not comparable to the real estate woes seen in the United States, Spain and Ireland.
"I don't think we are in the same kind of situation at all," she said.
A downward revision to non-farm payrolls on Thursday to -0.2 percent quarter-on-quarter between April and June from the -0.1 percent published previously came as no surprise, she said.
France's jobless rate, according to internationally recognized ILO standards, stood at 7.6 percent in the second quarter, prompting Lagarde in the past to hail the country's lowest jobless rate in more than two decades.
But economists are wary about prospects for the jobless rate in the months ahead given the fragile economic environment.
"I am not surprised at this figure because we had a (GDP) growth rate in the second quarter of minus 0.3 percent," Lagarde said of Thursday's non-farm payrolls figure.
The European Commission said on Wednesday it expected France, the euro zone's second biggest economy, to stagnate in the third quarter rather than tip into technical recession. (Reporting by Tamora Vidaillet; Editing by Victoria Main)
Add comment