The French economy grew by surprising 0.8 percent in the first quarter, its fastest rate since late 2000, according to a preliminary estimate released on Wednesday which gave a boost to hopes of an upturn.
The so-called "flash estimate" by national statistics body INSEE was higher than the 0.5 percent consensus forecast of economists polled by Reuters and buoyed expectations of full year growth of just under two percent.
"It's higher than expected, probably pulled up by consumer demand. It's a good opening for 2004 and it may prompt some people to revise upwards their growth forecasts," said Laure Maillard, economist at the Caisse des Depots savings bank.
INSEE put growth for the last quarter of 2003 at 0.6 percent, just under an earlier estimate of 0.7 percent.
The first quarter read-out was the highest growth in gross domestic product since the 1.4 percent registered in the final quarter of 2000, before a sustained dip that had the euro zone's second largest economy narrowly skirting recession last year.
INSEE noted in a commentary that the rise was "in line with the effective rise in household consumption". France's ruling conservatives have recently gone on a campaign to boost activity by spending more.
There was more good news as the French customs office reported a surge in France's trade surplus to 827 million euros in March from 320 million the month before as exports advanced, largely to other countries within the European Union.
But analysts cautioned that activity appeared largely based around consumption and that other components would need to take off for the upturn to be strongly founded.
Recent data showed French consumer confidence continued its gradual improvement in April but still remained relatively low.
Prime Minister Jean-Pierre Raffarin said last week the French economy was growing at a rate "above two percent" and creating jobs.
The government's official growth forecast for 2004 is 1.7 percent. The French economy grew just 0.5 percent last year.
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