French Economy Contracted Most In at Least Three Decades
France’s economy shrank the most in at least 30 years in the fourth quarter as companies braced for recession by slashing investment and paring jobs.
Gross domestic product fell 1.2 percent from the third quarter, when it rose 0.1 percent, the Paris-based statistics office Insee said late yesterday. The contraction was the most since it started comparable figures in 1978 and was in line with the median forecast of 20 economists in a Bloomberg survey. German, Italian and euro region figures are due later today.
“It’s a black quarter,” said Pierre-Olivier Beffy, an economist at Exane BNP Paribas in Paris. “The recession is far from being over.”
The Bank of France expects the economy to follow trading partners Germany and Spain into a recession this quarter, the first in 16 years. Facing rising discontent at home, President Nicolas Sarkozy this week announced 6 billion euros ($7.7 billion) in loans for carmakers PSA Peugeot Citroen and Renault SA. He is also pushing a 26 billion-euro stimulus package to spur construction and buoy hiring as the jobless ranks swell.