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France's economy fails to grow in 1st quarter

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[May 15, 2012]  PARIS (AP) -- France's economy failed to grow in the first quarter of the year, according to data released Tuesday, raising concerns that the country could be heading toward a recession.

Gross domestic product was stagnant from January to March, the national statistics agency Insee said. It also revised down growth in the fourth quarter of last year from 0.2 percent to 0.1 percent. Some analysts expect GDP to start contracting next quarter.

That's bad news for Francois Hollande, who takes office as president on Tuesday and has vowed to restore France's growth by investing in infrastructure and small businesses. He has also promised to rein in the deficit -- a task made harder by stagnating growth.

A small glimmer of hope, however, came later in the morning, when Insee announced that the economy added 10,200 jobs in private, non-agricultural sectors, an uptick of 0.1 percent.

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France lost more than 22,000 jobs in the last quarter of 2011 and has an unemployment rate of 10 percent.

Hollande has built his program around an expectation of 0.5 percent GDP growth for the year, which is in line with the EU's forecast.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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