“The French economy fell into its third recession in four years, increasing pressure on PresidentFrancois Hollande to adopt policies to revive growth.
Gross domestic product shrank 0.2 percent in the three months through March, following a revised 0.2 percent contraction in the previous quarter, national statistics office Insee said today. Economists expected a 0.1 percent drop, according to the median of 25 forecasts gathered byBloomberg News.
Celebrating his first anniversary in office today, Hollande is struggling to reduce the number of jobseekers from a record 3.22 million and lift his popularity rating from a record low. With the wider euro-area economy set to shrink for a second year in 2013, Hollande has been pushing to slow the pace of deficit reduction in the 17-nation bloc in favor of more pro-growth policies.
“The most important thing now is to create growth and employment,” Finance Minister Pierre Moscovici said this week in Brussels. “We must absolutely fight to have stronger growth in 2014 and to have the start of that growth in 2013.”
Euro-area GDP will drop 0.4 percent this year after a 0.6 percent decline in 2012, according to European Commission forecasts released earlier this month. First-quarter figures for the region will be published later today.
The commission said May 3 that it would give France another two years to reduce its deficit to less than 3 percent of GDP, though it said the nation’s lack of competitiveness is as much a part of the problem as the lack of growth in the region.
Hollande needs to press ahead with promises to revamp the nation’s labor law and pension system, the Commission said….”
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