The French gross domestic product (GDP) shrank by 1.2 per cent in the fourth quarter of 2008 according to French Finance Minister Christine Lagarde.
The Finance Minister also warned that 2009 would see another contraction of over 1 per cent.
Q4 figures on the French economy
Households’ consumption expenditures slightly accelerated (+0.5% after +0.1% in the third quarter). Total Gross Fixed Capital Formation (GFCF) slackened (-1.1% after -0.2%), driven by the sharp drop of nonfinancial corporations’ GFCF (-1.5% after +0.1%), and despite a softer decline of households’ GFCF (-0.3% after -0.6%). Exports collapsed (-3.7% after +1.0% in the third quarter), whereas imports markedly weakened (-2.2% after +1.1%). All in all, foreign trade balance contributed -0.3 to GDP growth this quarter (after a null contribution in the previous quarter). Eventually, inventory changes contributed -0.9 points to GDP growth, after 0.0 in the third quarter.
Social unrest in France highlighted in an article on Bloomberg:
French President Nicolas Sarkozy has struggled to convince a sceptical public that he has chosen the right strategy to fight the economic downturn sparked by the global financial crisis.
More than 1 million people took to the streets this month to protest at his economic policies, which favour public investment in projects such as building roads and modernising train lines rather than giving more help directly to consumers.
Fact is, France is the second biggest economy in the Euro zone and one where worker’s unions, riots, strikes and other social unrest have a long history. Time will tell how the public will react as the economic crisis continues to wipe out jobs, and cause more tension among political parties but the predictions all point towards more criticism towards government and more social unrest.
(C) image from http://www.insee.fr/en/indicateurs/indic_conj/donnees/doc_idconj_26.pdf
Related news articles:
