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French fourth quarter GDP growth will slip to 0.2%, Bank of France estimates

FILE PHOTO: The Eiffel Tower and the Paris skyline is seen from the Airparif Generali Balloon which flies over the Andre Citroen park in Paris, France, June 25, 2019. REUTERS/Charles Platiau

PARIS (Reuters) - The French economy should grow 0.2% in the fourth quarter, the Bank of France estimated on Tuesday, which would mark a slowdown from the third quarter as international trade disputes cloud the outlook for the global economy.

Business leaders expect industrial production to slow in November, particularly among carmakers which have been hit by trade disputes, and a slowdown in construction, the French central bank’s survey said.

The bank’s measure of sentiment in services dipped to 98 points in October from 99 last month, although sentiment in industry rose to 98 points in October from 96 in September.

France’s economy managed to defy forecasts for a slowdown in the third quarter after the government injected billions of euros of stimulus, enabling France to outperform Germany which is teetering on the brink of recession.

Third-quarter economic growth of 0.3% was good news for French President Emmanuel Macron, although concern remains about the impact of international trade disputes on both the euro zone and global economy.

Swiss bank UBS said in a research note that it expected French growth of 1.3% in 2019 and 1% in 2020, compared to its forecasts of 0.5% growth for Germany in 2019 and 0.6% in 2020.

Brexit and a trade dispute between China and the United States have hit the German economy, which relies on exports, more than France and the French economy has been more resilient than Germany’s so far.

“Germany’s slowdown has had an impact obviously on France, with Germany being the largest European economy, but this is not new, as the slowdown had started in 2018. France, with a smaller export sector, had suffered less from this slowdown,” said Gilles Pradere, senior fund manager at Swiss investment firm RAM Active Investments.

Reporting by Sudip Kar-Gupta; editing by Dominique Vidalon, Larry King