France’s economy shrank and lost jobs for the fourth straight quarter in the first three months as companies slashed investment and exports plunged.
Gross domestic product fell 1.2 percent from the fourth quarter, when it slipped 1.5 percent, statistics office Insee said. Insee revised earlier data today, revealing that France has been in a recession since the third quarter. Economists expected gross domestic product to decline 1.3 percent in the first quarter, according to the median of 17 forecasts in a Bloomberg News survey.
“Past quarters were worse than we believed,” said Frederique Cerisier, an economist at BNP Paribas in Paris who plans to revise her forecast down. “Most of what we thought singled out France is gone.”
After the figures were released, Finance Minister Christine Lagarde changed the government’s GDP expectations to a contraction of “around” 3 percent as the global slump saps exports, prompting companies to fire workers and scale back inventories. Rising unemployment is threatening to curb consumer spending, the main motor to French growth, and undermine a recovery in the second half.
France’s data reflect the situation across the euro region. Germany, the region’s biggest economy and France’s largest trading partner, shrank 3.8 percent in the first three months, the largest contraction in four decades. The European Union’s statistics office will release GDP figures for the bloc at 11 a.m. and economists surveyed by Bloomberg expect a contraction of 2 percent.
‘Better Off’
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