France may go into recession this year

October 3rd, 2008 - 2:23 pm ICT by IANS  

Paris, Oct 3 (DPA) After shrinking by 0.3 cent in the second quarter of this year, France’s economy will continue to contract for the next two quarters, plunging the country into a recession, the government’s statistical office Insee said Friday.According to the forecast, France’s GDP is to contract by 0.1 percent in each of the next two quarters. A recession is defined by two consecutive quarters of negative growth.

“If the financial turbulence does not get worse,” GDP growth for 2008 will be 0.9 percent, Insee said in a statement. The French economy grew by 2.1 percent last year and by 2.4 percent in 2006.

As a result, unemployment in France will climb to 7.4 percent by the end of the year, from the current 7.2 percent, Insee said.

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