France: Triple Dip

May 15th, 2013
in econ_news, syndication

Econintersect:  France has dipped into its third recession in the wake of the Great breakingnews130pxFinancial Crisis (GFC).  The other "heavyweight" of the Eurozone, Germany, managed to swing back to almost imperceptible growth in the first quarter of 2013.

France saw its GDP shrink by 0.2% in the first quarter, matching the decline in the fourth quarter 2012.  Taking the two quarters together, however, France has not seen as much contraction as Germany.  The latter had fourth quarter GDP revised down to -0.7%.  When that is combined with the first quarter +0.1%, the two quarters recorded a decline of 0.6%, larger than that for France (-0.4%).

Follow up:

Before the first quarter GDP report came out, the Bank of France had forecast that second quarter GDP would come in at +0.1%.  However, the first quarter had been expected to fall less than was actually reported; thus the second quarter expectation could well be revised downward.

France showed the greatest weakness in investment which has been a serious drag on the economy for three quarters now (-0.8%, -0.7% and -0.9% over the last three quarters, most recent listed first).  Consumer spending was also a drag, down 0.1% in the first quarter.

Germany was an even bigger disappointment, with the +0.1% falling short of the expected 0.3% by larger margin than the French shortfall.  The biggest disappointment of all, however, has to be the downward revision fo fourth quarter GDP growth for Germany to -0.7% (-2.8% annualized).

Year-over-year both countries reported contraction:  -1.4% for Germany and -0.5% for France.


French GDP decreased again in Q1 2013 (-0.2%) (National Institute of Statistics and Economic Studies, 15 May 2013)

Gross domestic product slightly up in 1st quarter of 2013 (Statistisches Bundesamt, 15 May 2013)

Germany Q1 GDP grows 0.1%, missing expectations (Carka Mozee, MarketWatch, 15 May 2013)

France contracts in 1st quarter as Germany returns to growth (Michael Steen, Financial Times, 15 May 2013)

French Economy Falls Into Recession (William Horobin, Dow Jones Business News,, 15 May 2013)

Correction to Bank of France Sees 2Q GDP Growth at 0.1% Story (Dow Jones Business News,, 13 May 2013)

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