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Growth slows in Europe's leading economies

2010-11-12 10:12:36

Siemens factory Economic recovery has been reflected in positive figures from industrial giant

The pace of economic recovery has slowed in Europe's major economies, according to official estimates.

Germany, Europe's largest economy, has seen a sharp slowdown in the third quarter, with growth of 0.7% compared with the record expansion of 2.3% it reported in the previous three months.

In France, GDP grew by 0.4% between July and September, compared with growth of 0.7% in the previous quarter.

The 16 eurozone members grew 0.4% on average, down from 1% growth before.

Italy also saw its rate of recovery decline, to 0.2% from 0.5% in the second quarter.

But in crisis-hit Greece, the economy contracted at a slower rate of -1.1%, compared with -1.7%.

Last month, figures revealed that the UK economy had grown by 0.8% in the third quarter.

'Solid growth'

Germany's growth rate in the second quarter - now revised from 2.2% to 2.3% - was the fastest since the country reunified.

Announcing its first estimate of third-quarter growth, the German statistics office Destatis said the upturn was continuing.

But it said the slower pace had been expected, given the record result in the second quarter.

Demand for its goods is crucial to the world's second largest exporter, and Destatis said both domestic and foreign demand had made a positive contribution to growth.

It said the reasons for expansion were wide-ranging, with household and government expenditure, demand for machinery and equipment, as well as imports and exports all contributing.

France's finance minister Christine Lagarde said this week that the economy was recovering in a "solid way".

France is facing a record budget deficit of 7.7% of GDP this year.

It has announced government spending cuts and the end of some tax breaks to try and bring it down.

Its plans to raise the pension age have faced fierce opposition.

The government is forecasting economic growth of 2% for 2011, which would also help mend its finances. But this is higher than many economists are forecasting.