Recession to last until spring
National statistics body says figures suggest the last quarter of 2011 and first one of 2012 will see drops in GDP
INSEE, the national statistics body, believes France is in an official recession period in this last part of 2011, moving into early 2012.
It estimates a 0.2% reduction in GDP in the fourth quarter of 2011 and 0.1% in the first quarter next year. Two consecutive quarters of decreases is the definition of a recession.
Consumer spending has been falling, as have investment and export.
The news comes as France’s AAA credit rating – and that of other eurozone countries – is thought to be under threat.
Insee says the problem is affecting the whole of the eurozone, however spring should see improvements, unless the debt crisis continues to damage confidence.
A small upturn – 0.1% - is expected in the period April to June, but Insee says the government’s predictions of 1% growth, on which it based its second austerity plan, will be hard to maintain.