French economy stalls in Q2, inflation speeds up

PARIS, France, Aug 28: France's economic growth stalled in the second quarter, statistics office Insee said Friday, revising down its initial forecast while reporting a sharp rise in inflation in August.

GDP growth was flat in the quarter, instead of the 0.2 per cent growth Insee first reported last month.

That followed a 0.2 per cent decline in the first quarter -- also a downward revision from the previous estimate of 0.1 per cent.

"These revisions reflect the even more deteriorated state of agricultural production compared with the information available at the end of July," Insee said.

The French economy has been slowing since the third quarter of last year, hit by weak consumer spending and, more recently, the surge in energy prices from the war against Iran.

In June, the country was hit by an unprecedented early summer heatwave that took a heavy toll on farmers, Finance Minister Roland Lescure said Friday.

"Harvests are likely to be very tough for certain products, and in certain regions... the impact is absolutely horrific, enormous," Lescure told a business conference in Paris.

Insee said household purchasing power fell 0.5 per cent in the second quarter after slipping 0.1 percent in the first.�"AFP