Paris  - Defying predictions of a recession, the French economy grew by 0.1 per cent in the third quarter of 2008, the government's statistical office Insee said on Friday.

Following a GDP drop of 0.3 per cent in the second quarter of this year, most analysts - including Insee - had foreseen more negative growth for the period July to September, which would have represented a technical recession.

But consumer spending unexpectedly grew by 0.2 per cent in the third quarter, which helped fuel the rise in GDP, Insee said.

French Finance Minister Christine Lagarde was delighted with the report.

"This number is astonishing because everyone expected a negative figure," she told RTL radio. "The government's policies are beginning to have an effect." (dpa)