The French economy, which is Europe’s third largest, will slip into its first recession in 16 years in the first quarter of 2009 according to the Bank of France this morning. French gross domestic product will shrink 0.6 percent in the three months through March, following a 1.1 percent contraction in the final quarter 2008.
Basically France has steered clear of “technical” recession to date due to very slight growth (0.1%) acheived in Q3 2008. That being said, it is also the case that the French economy is certainly the “eurozone big 4″ economy which is holding up best during the current crisis. Doubtless when all this is over we will spend a good deal of time talking about exactly why this is.
I would guess that the French economy is holding up best because it’s not so vulnerable to the risks of the other three, which are a mix of banking, property and export dependency.
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The French economy is a net beneficiary of funds from Germany and the UK, and has lagging performance indicator.
In 2009, the leveraged French economy will suffer more than Germany or the UK.