une 20 (Bloomberg) -- France's economy will expand by 1.6 percent this year, the slowest pace in five years, as rising prices damp consumer spending and the housing market slumps, the government statistics office said.
Europe's third-biggest economy will grow 0.2 percent in the second quarter, the least in almost two years and a third of the pace in the first three months, Paris-based Insee said in a quarterly report. The economy will stagnate in the third quarter and grow 0.2 percent in the final three months, Insee said.
A 40 percent increase in oil prices this year is raising manufacturing costs at a time when the euro's gain makes French goods less competitive outside Europe. Record gasoline costs and soaring food prices are also leaving consumers with less to spend, meaning domestic demand won't be enough to offset a decline in exports.
