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SECOND QUARTER OF SHRINKING ECONOMY HAS ALREADY SEEN HOUSEHOLDS AND BUSINESSES CUT SPENDING FRANCE is officially in recession, with statistics agency Insee revealing today that the economy
shrank by 0.2% in the first quarter of 2013, the second consecutive quarter with a reduction in growth. The last quarter of 2012 also saw demand for goods and service contracting 0.2% and
the continuation of the trend into 2013 is the official sign of a recession. Forecasts from the International Monetary Fund and the Organisation for Economic Co-operation and Development had
warned that it would happen, but the government maintains that it will turn this round to achieve 0.1% growth for 2013. Being in recession means less tax revenue for the government and that
means new budget measures could be announced. Both households and industry have been affected: with families seeing their buying power reduced and being forced to cut their spending (down
0.1% in the first quarter of 2013) while industry has seen capital investment down 0.9% since the turn of the year. The recession makes it even harder for President Hollande, who is due to
face questions on his year in power at a press conference tomorrow afternoon, to keep his promise of reducing unemployment by the end of the year. To follow the President's press
conference, go to Elysée website
