FRANCE is officially in recession, with statistics agency Insee revealing today that the economy shrank by 0.2% in the first quarter of 2013, the second consecutive quarter with a reduction in growth.
The last quarter of 2012 also saw demand for goods and service contracting 0.2% and the continuation of the trend into 2013 is the official sign of a recession.
Forecasts from the International Monetary Fund and the Organisation for Economic Co-operation and Development had warned that it would happen, but the government maintains that it will turn this round to achieve 0.1% growth for 2013.
Being in recession means less tax revenue for the government and that means new budget measures could be announced.
Both households and industry have been affected: with families seeing their buying power reduced and being forced to cut their spending (down 0.1% in the first quarter of 2013) while industry has seen capital investment down 0.9% since the turn of the year.
The recession makes it even harder for President Hollande, who is due to face questions on his year in power at a press conference tomorrow afternoon, to keep his promise of reducing unemployment by the end of the year.
To follow the President's press conference, go to Elysée website