French economy records zero growth in first quarter 2012
FRANCE’S economy did not grow in the first quarter of the year, raising concerns that the country could be headed towards a recession.
But there was better news in Germany, where the economy grew by a stronger-than-expected 0.5pc in the first three months of the year despite Europe's debt crisis.
French GDP was stagnant from January to March, the national statistics agency Insee said. It also revised down growth in the fourth quarter of last year from 0.2pc to 0.1pc. Some analysts expect GDP to start contracting next quarter.
The news came on the same day that president-elect Francois Hollande takes office, vowing to restore France's growth by investing in infrastructure and small businesses. But he has also promised to rein in the deficit - a task made harder by stagnating growth.
Mr Hollande built his programme around an expectation of 0.5pc GDP growth for the year. That is in line with the EU's forecast.
In Germany, exports helped the economy bounce back from a slight fall in output of 0.2pc in the fourth quarter of last year, the government statistics agency said.
Germany remains a standout performer despite Europe's troubles with too much debt in several countries. Unemployment is low and exports of manufactured goods such as cars and machinery remain robust. Compared with the same quarter a year ago, Germany grew 1.7pc.
The European Commission expects the economy in the 17 countries that use the euro to shrink 0.3pc this year.