The Bank of France has cut its estimate for French growth, saying the eurozone’s second biggest economy would now likely contract by 0.1 per cent in the second quarter.
France managed to reduce its public deficit to €59.9 billion which ‘at this point in the year’ was in line with a 2012 budget...
The central bank previously expected growth to be essentially flat in the three months from April through June. If the figures are confirmed, it would be the first quarterly contraction since France pulled out of recession in 2009.
A second contraction in the third quarter would mean that France joined EU countries such as Britain, Greece, Italy, Portugal and Spain in recession.
In its latest outlook, the national statistics office INSEE forecast second quarter economic growth of 0.2 per cent but the figure was issued in March and several indicators released since then suggest it could be revised lower.
The French customs service meanwhile reported that the national trade deficit deteriorated in April to €5.8 billion.
But the public deficit in April declined by €1.5 billion from the same month a year earlier, owing to increased tax revenues and a one-off boost from the sale of fourth-generation telephone frequencies, the budget ministry said.
France managed to reduce its public deficit to €59.9 billion, which “at this point in the year” was in line with a 2012 budget established by the former conservative government, a ministry statement said.
On May 15, INSEE said the French economy had stalled in the first quarter of 2012.
In addition to recording zero growth in the first three months of the year, INSEE revised its fourth quarter 2011 growth figure down to 0.1 per cent from 0.2 per cent but maintained that output had expanded by 1.7 per cent in 2011.
Meanwhile, French unemployment climbed higher in the first quarter of 2012, hitting the symbolic level of 10 per cent, up by two per cent from the previous three-month period. That put the French unemployment rate back to a level last seen in 1999.
The European Commission forecast overall growth this year of 0.5 per cent in France, in line with budget predictions by new French President François Hollande.