France Lifts Economic Recovery Forecast

PARIS (AP) -- France's economic recovery will be slightly stronger than previously forecast, although unemployment will remain a problem, the finance minister said Thursday.

Christine Lagarde said French economic contraction this year will be 2.25 percent, less than the 3 percent the government had been forecasting until now. Economic growth next year will reach 0.75 percent, Lagarde said, above the government's previous forecast of 0.5 percent.

"France is doing twice as well as the euro-zone average," Lagarde said on French television station LCI. But "the crisis is not over," Lagarde added.

"To be out of the crisis, the economy has to stop destroying jobs and we have to get back to net job creation, which won't happen right away," Lagarde said.

France appears to be weathering the worst economic downturn since the Great Depression better than most, recording a small level of growth -- 0.3 percent -- in the second quarter this year.

Both France and Germany pulled out of recession in the second quarter as their economies returned to growth. The EU sees France growing 0.4 percent in the third quarter and 0.3 percent in the fourth.

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