France and Germany exit recession

[Herer]

The French and German economies both grew by 0.3% between April and June, bringing to an end year-long recessions in two of Europe's largest economies.

 

"The data is very surprising. After four negative quarters France is coming out of the red," said French Finance and Economy Minister Christine Lagarde.

 

Few analysts expected the economies to come out of recession this early.

 

The eurozone's official gross domestic product (GDP) figures will be released later on Thursday morning.

 

Both the French and German economies last grew in the first quarter of 2008.

 

The German economy, Europe's largest, contracted by a revised 3.8% in the first three months of the year.

 

And while exports rose 7% in June, the fastest pace in nearly three years, few analysts had expected a return to overall economic growth so quickly.

 

The country's Federal Statistics Office said that household and government expenditure had boosted growth.

 

Consumer spending

 

France's economy had contracted by a revised 1.1% in the first quarter.

 

Ms Largarde said that consumer spending and strong exports had helped to pull France out of recession.

 

"What we see is that consumption is holding up," she said.

 

Official figures showed that household consumption rose by 0.4% in the second quarter.

 

She said government incentive schemes for trading in old cars for new ones, together with falling prices, were helping consumers.

 

Foreign trade contributed 0.9% to the GDP figure - a "very strong impact," said Ms Largarde.