France to enter recession in 2009

FRANCE will enter into recession at the beginning of 2009, predicts the government statistics institute Insee.

In the last quarter of 2008 the economy will have shrunk 0.8%, with a further drop of 0.4% predicted for the first quarter of 2009 – officially putting the country in recession.

In the last half of 2008, 150,000 jobs were lost in the commercial sector, Insee said.

It predicts that a further 214,000 jobs could be lost in the first six months of 2009 sending unemployment up to 8% by mid June.

Prime Minister François Fillon said France would resist the economic downturn better than other countries in Europe.

Insee predicts that the government economic relaunch plan could buffer the downturn, to 0.1% by the middle of 2009 but unless it grew by 1.4% in both the third and fourth quarter it would remain in recession throughout the year.

One expert commenting on the statistics said it was likely France would end 2009 with the economy contracting between 1-1.5%