Don't miss

Replay


LATEST SHOWS

THE DEBATE

Splintered Left: French Socialists divided ahead of primary runoff (part 1)

Read more

THE DEBATE

Splintered Left: Are Europe's social democrats obsolete? (part 2)

Read more

EYE ON AFRICA

New President says Jammeh has agreed to cede power

Read more

ACROSS AFRICA

France finally grants Senegalese vets citizenship

Read more

THE OBSERVERS

Pollution threatens island paradise of Mauritius, and one Cameroonian expat's quest to bring safe drinking water to his country

Read more

THE INTERVIEW

Publicis boss encourages firms to move staff to Paris post-Brexit

Read more

THE INTERVIEW

'Fake news has had almost no impact on Wikipedia'

Read more

FOCUS

Iraq: Embedded with French special forces in Mosul

Read more

ENCORE!

Dominique Dalcan: Godfather of French 90s pop returns to his roots

Read more

Business France

Economy set to contract by 3 percent

Text by NEWS WIRES

Latest update : 2009-06-08

The French economy will likely see a 3 percent decline in 2009, a source close to Economy Minister Christine Lagarde said. The contraction is double the previously estimated figure. The same source also cited a 0.5 percent rebound in 2010.

AFP - The French economy is likely to contract by 3.0 percent this year, twice the previous forecast amount, a source close to Economy Minister Christine Lagarde said on Monday.

The economy would then rebound and grow by 0.5 percent in 2010, the source said.

In announcing budgetary measures in March, the government had said it expected the economy to contract by 1.5 percent this year and to recover gradually in 2010 when gross domestic product would grow by 1.0 percent.

In 1975, after the first so-called oil price shock that serves as a reference point for European economies since World War II, the French economy shrank by 1.0 percent.

The source said that after contraction of 1.2 percent in the first quarter of this year, on a quarterly basis, "the phase of brutal adjustment is giving way to a period of stabilisation."

The source said that economic activity should pick up at the beginning of 2010, as the effects were felt of policies by central banks and governments to support economies.

"This is a fairly prudent outlook," the source said.

Household consumption, which is the main force behind growth of the French economy, should "hold up in principle" and remain steady in the next few months to show growth of 0.3 percent this year and 0.7 percent in 2010, the source said, giving credence to a report in the newspaper Le Figaro.

Investment by businesses was expected to show a slump of 9.4 percent this year and then of 1.2 percent next year.

The government expected conditions on the employment market to worsen further for a few more quarters up to some point in 2010, the source said.

The French unemployment rate jumped in the first quarter of this year by 1.1 percentage points, the biggest increase since 1975, to 8.7 percent of the workforce from 7.6 percent in the last quarter of last year.

On Monday, the right-wing government under President Nicolas Sarkozy was celebrating a resoundingly strong performance in elections to the European parliament on Sunday.
 

Date created : 2009-06-08

COMMENT(S)