By Anna Willard and Veronique Tison
PARIS, Nov 20 (Reuters) - France's economy may contract by more than the 0.1 percent that national statistics office INSEE is forecasting for the fourth quarter, the official responsible for the report said on Thursday.
Eric Dubois, the head of INSEE's economic department, said the unexpected growth of 0.14 percent reported in third quarter growth last week did not impact the agency's -0.1 percent GDP forecast but he said the outlook was uncertain.
"The only thing is from our point of view, the figure from the third quarter does not change our diagnosis for the fourth quarter," he said in a telephone interview.
"One could become negative with regard to this forecast. The risks are more to the downside than the upside."
Insee figures last week showed that the euro zone's second largest economy narrowly escaped recession in the third quarter with an expansion of 0.1 percent, confounding forecasts and following a contraction of 0.3 percent in the second quarter. Dubois said France performed better in the third quarter than other euro zone countries because the second quarter data contained elements that were artificially low.
The French GDP contrasted with Germany, Britain and Italy and the euro zone as a whole which have all fallen into recession.
"In contrast, we had a worse second quarter than in the rest of the euro zone," Dubois said.
"We felt that in the second quarter there were some figures that were undoubtedly artificially low. Without doubt there was some transfer of production from the second quarter towards the third quarter, in particular in the car sector."
He also said it appeared that French households had drawn on savings more than in previous quarters in July, August and September in contrast to other countries.
MISSED FORECASTS
INSEE, along with most private economists and the Bank of France, had forecast a contraction in the third quarter, which would have put the economy in recession.
Several economists expressed surprise over the 1.9 percent rise in exports in the Q3 GDP report because it followed a 0.5 percent fall in exports for the quarter announced in the September trade data which is compiled by the customs office.
Dubois said this was because of different methods between the two agencies used for seasonal adjustment.
"They have their way of thinking about it, we have ours," he said.
"We have as a principle that the sum of exports by product be equal to the total of exports ... whereas the customs office uses seasons' variations, series by series without checking that the sum of inventories is equal to the total."
He said there were no plans to align the methods.
"We proceed in the same way for seasonally adjusting the whole series, not only for trade, but consumption, investment," he said.
"We need to have a single treatment ... a constraint which the customs office does not have."
But he said seasonally adjusting the export data as the customs office does would not have made a difference to the overall GDP number.
"It's not an enormous difference. And it has no significance for GDP," he said.
"It would have changed the evaluation we make for commercial activity knowing that it's not a lot. In place of having 0.14 percent of GDP, we would have had 0.13 percent ... The 0.1 percent, would not have changed."
He said he did not see it as a serious problem that the INSEE forecast was out of line with the actual number.
"For a year we have regularly got it wrong, once in one way and once in the other," he said.
"For the second quarter we forecast +0.2 and it was -0.3 percent. Unfortunately, our crystal ball is a bit opaque, forecasting errors are part of our job." (Editing by Stephen Nisbet)