Recession to last until spring

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.