There are many digital cameras available for less than £110, but the vast majority of them are very disappointing. At this price level even models from well-known brands suffer from poor build quality, slow performance and inferior image quality. One has to wonder therefore exactly how Panasonic has managed to produce the Lumix DMC-FS62.

It features a 10.1MP sensor, a high-quality Leica 4x zoom lens complete with optical image stabilisation, and a decent 2.5in LCD monitor all wrapped in an attractive and durable all-metal body. It has the kind of performance you’d expect from a top-of-the-range model, with image quality to match, but costs as little as £100 from some online retailers.

The overall design of the Panasonic FS62 bears a close resemblance to the company’s top-of-the-range consumer compact the DMC-FX60, and it certainly looks and feels a lot more expensive than it actually is. The control layout is very straightforward, with Panasonic’s usual slider switches for power and record/playback modes, but instead of the rotary mode dial of more expensive models it has a simple button which cycles through the various shooting modes.

The Panasonic FS62 has both a main menu and an on-screen live menu, and both are well thought out and operate quickly and smoothly.

As with most budget compacts, the Lumix FS62 isn’t exactly overloaded with features, and lacks one or two useful refinements such as spot metering or saturation, contrast and sharpness adjustment; but it does have Intelligent Auto with scene recognition, as well as 25 scene mode programs and an option to save your own My Scene Mode program as well. It also has Panasonic’s excellent Mega OIS optical image stabilisation system – a very welcome feature and a rarity on cameras at this price level.

The video recording mode is a bit basic but is better than some other budget cameras, shooting at 848 x 480 (WVGA) resolution at 30fps, with clips limited to 15 minutes. As usual with cheaper cameras, the optical zoom cannot be used while recording.

The camera’s performance is remarkable for a budget camera. It starts up in approximately two and a a half seconds, and in single-shot mode it has a shot-to-shot time of approximately 1.7 seconds, which is quick by any standard. Its performance in continuous shooting mode is even more impressive, shooting at a consistent 1.6fps at full resolution.

Image quality is often a problem with budget cameras, but not so with the Panasonic DMC-FS62. Exposure metering and colour rendition are extremely accurate, and the optical quality of the lens lives up to its illustrious name, with excellent corner-to-corner sharpness, minimal barrel distortion and no visible chromatic aberration.

Noise control isn’t quite up to the standards of Panasonic’s more expensive cameras, but it is far from shabby, producing consistently usable results at 400 ISO. Dynamic range is also better than average, with good shadow and highlight detail in all but the highest contrast lighting. There are cameras that cost twice as much that can’t match the quality of is excellent little camera.