France in a Recesssion, GDP Data Confirms

French gross domestic product contracted in the first quarter of the year, confirming the euro-zone’s second largest economy succumbed to the recession in the wider euro zone, statistics showed Wednesday.

France’s economy contracted 0.2% in the first quarter from the previous quarter, when GDP fell 0.2%, statistics agency Insee said. Through 2009, France posted weak or negative GDP, but had avoided recession defined as two consecutive quarters of economic contraction.

The GDP data Wednesday confirms Insee’s initial reading of first quarter GDP published in May.

The weak economy has derailed the French government’s plans to bring down the deficit and fuel employment.

French President Francois Hollande is sticking to his target to curb the rise in unemployment, but Insee forecast last week that unemployment will keep rising to reach over 11.1% at the end of the year. Insee also forecast last week that the economy rebounded slightly in the second quarter of the year, but for the whole of 2013 GDP will be 0.1% lower than 2012.

Consumer spending fell 0.1% in the first quarter of 2013 from the previous quarter, exports declined 0.4% and investment of non-financial companies fell 1%, Insee said Wednesday.

Source: Market Watch