France has entered its second recession in four years after the economy shrank by 0.2 per cent in the first quarter of the year, official figures show. Its economy shrank by the same amount in the last quarter of 2012.
Household consumption expenditure was almost stable (–0.1 per cent after 0.0 per cent), meanwhile gross fixed capital formation (GFCF) was still diminishing (–0.9 per cent after –0.8 per cent). Overall, total domestic expenditure (excluding change in inventories) slightly decreased, weighing down GDP growth by –0.1 point.
President François Hollande has said he expects zero growth in 2013, lower than a 0.1 per cent growth forecast by the French government. The budget deficit is also expected to remain well above the EU target of 3 per cent of GDP, with the Commission estimating it will be 3.9 per cent this year.
Separate figures showed that the recession across the 17-nation eurozone has continued into a sixth quarter. The economy of the 17-nation bloc shrank by 0.2 per cent in the January to March period, according to the EU's statistics office Eurostat, with nine of its members now in recession. Within the zone, France has record unemployment and low business and consumer confidence. Germany's economy, generally considered to be the eurozone's strongest, grew by just 0.1 per cent in the quarter.
Insee press release
Further reporting © BBC
© Insee - National Institute of Statistics and Economic Studies, France
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