France hits recession in first quarter

15th May 2009, Comments 0 comments

France has officially entered the recession after the economy shrank by 1.2 percent in the first quarter.

Paris – The French economy shrank by 1.2 percent in the first quarter, the national statistics agency said Friday, confirming it had officially entered recession despite outperforming neighbouring Germany.

France recorded marginal growth of around 0.1 percent in the third quarter of last year, thus avoiding entering a technical recession, but it has been clear for some time that it had been badly hit by the financial crisis.

According to new figures Friday from the state agency INSEE, French gross domestic product shrank 1.2 percent in the first quarter of 2009 after falling by 1.5 percent in the final quarter of last year.

A recession is usually defined as two quarters of negative growth.

INSEE also updated its figure for French growth in 2008, reporting that the economy had grown by only 0.3 percent last year rather than the 0.7 percent it had earlier offered as an estimate.

The French government expects the economy to shrink by around three percent this year, as the world financial crisis stifles credit and saps demand.

Meanwhile, France's neighbour and main trading partner Germany said its recession deepened in the first quarter, when the economy shrank by 3.8 percent, its strongest contraction since quarterly records began in 1970.

AFP / Expatica

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