The French economy grew by 0.5% in the first quarter of the year from the figure for the fourth quarter of 2005 on increased household consumption and exports, the latest official data shows.
The figures from the national statistics institute Insee showed that gross domestic product (GDP) had expanded by 0.3% in the last three months of 2005 on a quarterly basis.
Analysts nonetheless warned that the domestic savings rates had fallen and that companies had again trimmed profit margins at the expense of investment and job creation.
Household consumption increased by 0.8% in the first quarter of 2006, following a gain of 0.5% in the previous quarter. Exports jumped by 2.9% following a modest gain of 0.8% in the fourth quarter of 2005, while import growth slowed to 0.9% from 2%.
Insee maintained its full-year growth estimate of 2% for 2006, following an increase of 1.2% last year.
Analysts said that domestic investment was largely underpinned by property purchases, while industrial investment was lagging. They added that higher taxes and the lack of a notable pick-up in employment meant that 'households dipped again into savings to maintain consumption.
