Recent data from the INSEE national statistics institute has revealed that France’s economy has not advanced at all in the first quarter. The news is hardly a surprise, as France grapples with low household demand, a drop in investments, reduced exports and increasing levels of imports.
Though France, one of the largest economies in the Eurozone, saw a fraction of growth during the fourth quarter of 2011, outlook is bleak for further development in 2012. Still, the country has managed to avoid a devastating recession.
“There was no good surprise,” said Natixis Asset Management’s Philippe Waechter. “There was weak consumption, no investment.”
Household consumption, considered the generator of the economy, grew by 0.2% after 0.1% in last year’s fourth quarter. Capital investment, however, grew 1.3% last year only to fall 0.8%.
“The outcome was in line with expectations and does therefore not affect our forecast of a 0.2% contraction quarter-on-quarter in the Eurozone as a whole,” said Joost Beaumont of ABN Amro.
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