The French economy is weathering the global slowdown better than some had feared, official figures have revealed.

French economic output, or GDP, grew by 0.5% in the July to September quarter, more than analysts had expected, and enough to justify the government's forecast of at least 2% full-year growth.

The news came the day after Germany revealed that its economy had shrunk in the same period, sparking fears of a Europe-wide slump.

Both France and the UK have both seen their growth figures barely damaged by the after-effects of the 11 September attacks.

Slowdown fears

Some analysts still predict that the French economy will slow sharply towards the end of this year.

Although household consumption has remained strong, a drop in consumer spending last month could herald a retrenchment in the last months of the year, some economists have said.

Consumer confidence has been dented by a spate of lay-offs at major firms.

"We risk seeing zero percent GDP growth in the fourth quarter," said Emmanuel Ferry, economist at Exane.

"Germany is definitely the country which is the most vulnerable to a downturn in global trade...What is happening in Germany right now is probably what will happen both in the UK, France and the other countries in Europe which still seem to have robust growth," Eric Chaney, head of European research at Morgan Stanley, said.

"Germany has its own problems...The common factor is, first, global trade is experiencing a real slump and the other countries in Europe will of course be sensitive to that," he added.

Mixed news for 2002

Earlier this week, the Organisation for Economic Cooperation and Development, the so-called "rich nations' club", predicted that French growth would be 2% this year, fading to 1.6% in 2001.

The French government, meanwhile, forecasts that growth will pick up to 2.25-2.5% next year.

Finance Minister Laurent Fabius said on Thursday that falling interest rates, inflation and oil prices would help the economy deal with the global downturn.