French growth stagnates: state stats agency

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France's economy shrank by even more than was first feared during last year's historic recession and growth this year is less than forecast, the state statistics agency INSEE said Wednesday.

Revised figures show that the worst slowdown since World War II knocked 2.5 percent off France's gross domestic product in 2009, more than the 2.2 percent initially estimated.

Meanwhile, the economy grew by only 0.1 percent in the first quarter to March this year, calling into question the government's already modest recovery target of 1.4 percent growth over the year.

INSEE said growth was held back by low consumer confidence, which depressed the domestic household spending that is traditionally a motor of the French economy.

The agency had forecast growth of 0.2 percent in the first quarter and 0.3 percent in the second, and it now looks unlikely that this will now be reached.

INSEE's review also reached back to revise downwards official growth figures for 2008, which saw the start of the global financial crisis that has now become a deficit crisis for some eurozone governments.

Before, France had recorded the economy as having grown by 0.3 percent over the course of 2008. Now, INSEE said, it is thought that it only grew by 0.1.

© 2010 AFP

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