The French economy is likely to slip into recession in the third quarter, according to the country’s central bank which is forecasting a contraction of 0.1 percent.
The Bank of France said it has calculated that GDP already fell in the second quarter of the year. The official preliminary data for that period is due out next week.
The figures suggest the government will struggle to meet its forecast of 0.3 percent growth for the whole year.
Figures released on Wednesday also showed France’s trade gap widened to 5.99 billion euros in June, defying analysts’ expectations for an improvement as exports of cars and transport materials slumped.
“In July, industrial activity posted a slight contraction due mainly to lower levels of activity in the automotive and textile sectors,” the Bank of France said in its monthly survey.
It added: “The outlook for the coming months suggests a slight slowdown in economic activity … GDP is expected to decline by 0.1 percent in the third quarter.”
President Francois Hollande’s Socialist government has predicted the economy, which posted zero growth in the first quarter, would return to expansion in the second half of the year.