The French economy grew considerably faster than forecast in Q2, despite the recession concerns in the euro area.

Bolstered by a rise in exports, GDP in France increased 0.5% between April and June this year, after having risen by 0.1% in the first quarter, according to the Insee statistics agency on Friday. 

Whereas economists polled by Bloomberg had forecast growth of 0.1%.

The figures for France’s economy were upbeat following comments by European Central Bank President Christine Lagarde on Thursday in regard to the coming months in the euro region. Indeed, Germany is already struggling to exit a recession, whilst private sector activity in the bloc indicates a contraction this month.

Although in France, exports were bolstered by a cruise ship delivery, consumer spending declined by 0.4%, and investment grew by just 0.1%, Bloomberg reports.

“The near-term economic outlook for the euro area has deteriorated owing largely to weaker domestic demand,” ECB President Lagarde said as interest rates were raised for the ninth time since last July. “Over time, falling inflation, rising incomes and improving supply conditions should support the recovery.”

However, the rate hikes have increased loan costs for households and businesses in France, whilst consumer price growth is far above the ECB’s target of 2%.

Due to be published later on Friday, inflation data is forecast to reveal a minor slowdown in France this month to 5.1%. Whereas the euro region will announce its inflation reading, as well as GDP, on Monday.

As food inflation rises, consumers in France have been looking to reduce costs, with sales of own-brand products at Carrefour SA rising twice as quickly as national brands.

“We are still in this inflationary environment with trading down, with pressure on volume, with accelerations on private label and all the new behaviours of the customer we have observed for one year,” according to Carrefour Chief Executive Officer Alexandre Bompard this week.

In addition, consumer spending in France started to pick up by the end of the quarter, with a 0.9% rise in June as food purchases recovered in part.