New recession warning for France

Banque de France predicts 0.1% shrink in economy in third quarter - which would mean a return to recessionary times

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FRANCE could slip back into a recession by the end of September, experts at the Banque de France have warned today.

The bank's estimate for the third quarter is that the economy will shrink by 0.1% - making it the second consecutive quarter of decline and an official return to recession.

The Banque de France said poor figures from the industrial sector in July - especially cars and textiles - had contributed to its negative forecast.

Statistics body Insee disagrees for the moment. Its last forecast, at the end of June, was for a slight increase in the third quarter of 0.1% which would be enough to stay out of recession.

The finance ministry's official estimate remains at 0.3% economic growth in the 2012 full year, followed by 1.2% next year.

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