French economy flat, Italy shrinks in first quarter

Thursday 15 May 2014 12.17
French household consumption fell by 0.5% in the first quarter of the year
French household consumption fell by 0.5% in the first quarter of the year

France's economy failed to grow in the first quarter of 2014, according to data released today by the Insee national statistics institute. 

The figure was below the meagre 0.1% growth that Insee had forecast for the euro zone's second-largest economy between January and March.

Household consumption, the traditional motor of growth in France, fell by 0.5% in the first quarter, compared with a 0.2% rise in the last quarter of 2013.

French GDP in 2013 had risen by 0.4%, Insee said, revising its earlier estimate of 0.3%.

Meanwhile, Italy's gross domestic product shrank by 0.1% in the first quarter and was down 0.5% from the same time last year, according to an initial estimate from the Istat data agency. 

The result will be disappointing for Prime Minister Matteo Renzi's government as the country's worst recession since World War II had formally ended in the fourth quarter of last year with growth of 0.1%.

Italy's government has forecast economic growth of 0.8% this year but the International Monetary Fund and the European Commission both see the euro zone's third-biggest economy growing by just 0.6%.

Italy's economy contracted by 1.9% last year.

Today's data comes after official figures raised fresh concerns about the strength of the euro zone's recovery. 

Eurostat said the euro zone grew 0.2% in the three months to March, short of analyst forecasts for 0.4%.