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Good Economic News from Paris

Economic officials in France said this week that the country had witnessed its best period of economic growth within the past twenty years during the second quarter of 2006. Finance Minister Thierry Breton said the 1.1% economic growth observed in the quarter was unusual. French authorities say the gross domestic product (GDP) of the country is expected to grow by 1.9% this year. France`s economy has been slowly turning around. The government has vowed to improve economic growth and reduce the unemployment rate.

David Naude, of Deutsche Bank, said in response to the announcement that "We had seen in the previous quarter a temporary setback in business spending in France, both in terms of investment and inventories. Obviously, France will not sustain this kind of growth rate. But what we`re seeing is an upshift in the underlying trend of growth and we don`t see yet any signs of a deceleration, at least near term."

"There was a risk that the spike in oil prices was going to put businesses on hold, and we see that this was just temporary because we see a big rebound," Naude went on to say. French economic troubles have been the cause of several bouts of rioting and civil discontent, and there have been calls for the Prime Minister, Dominique de Villepin, and President Jacques Chirac to resign. France is set to hold elections in 2007.