France is in recession according to the official INSEE statistics agency but it said that it will be short and shallow.
INSEE sees the economy contracting in the final three months of this year by 0.2 percent and believes it will shrink by a further 0.1 percent in the first quarter of 2012.
It warned the Paris government’s growth target of 1.0 per cent for the coming year will be difficult to achieve.
INSEE blamed lower corporate investment and higher unemployment hitting consumer spending.
The INSEE economists also revised down their forecast for economic growth this year to 1.6 percent from the 1.7 percent forecast it made in October. The government expects 1.75 percent growth.
A recession is defined as at least two consecutive quarters of negative quarter-on-quarter growth. France came out of a year-long recession in the spring of 2009.