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French economy grew 1.7% last year

France's GDP grew slightly in the last quarter of 2011, bringing total economic growth for the year to 1.7%.

The figure, announced by the national statistics agency Insee, is slightly below the government's projection in October of 1.75%.

The French government has repeatedly revised down its growth expectations for this year and last year in recent months, forcing new budget cuts to keep it on track to balance its budget by 2016. It now expects growth for 2012 to be just 0.5%.

Those commitments are important to reassuring investors, skittish amid Europe's debt crisis, and for France's presidential campaign. President Nicolas Sarkozy has staked his credibility on reducing the deficit.

Meanwhile, Germany's economy slipped into reverse in the last quarter of 2011, with gross domestic product falling 0.2%, according to adjusted figures.

The drop in Europe's largest economy, reported by the Federal Statistical Office, was slightly less than the 0.25% that had been expected. The Statistical Office said the economy grew 3% overall in 2011, in line with preliminary figures released last month.

The government is predicting a return to 0.1% growth in the first quarter of 2012, and expects 0.7% growth overall for the year.

And Italy has slid into recession, according to preliminary figures from the national statistical agency. It said the economy contracted a quarterly rate of 0.7% in the last three months of 2011 - that was the second quarterly decline in a row, which is the official definition of a recession. The Italian economy registered growth of 0.4% last year, compared with 1.4% a year earlier.

The country is struggling to escape Europe's sovereign debt crisis with measures to cut spending and spur growth.


From Belfast Telegraph