France's economy showed no growth in the first quarter of 2012, the official statistics agency INSEE said today.
It also revised downward the growth figure for the fourth quarter of 2011, to 0.1% from 0.2%, while maintaining that the economy grew by 1.7% in 2011.
Analysts said that the figure for the first quarter was in line with the overall consensus but slightly lower than most had expected.
However the figures showed that "despite weak growth, France has not yet come close to recession," they added.
They said that a credit squeeze at the end of last year, rising unemployment, and "tamed" public consumption would probably weigh on growth in the next few quarters but consumption should provide some support.
Exports were expected to continue to grow, particularly if the euro fell slightly. Surprisingly strong growth in Germany should also support France and the rest of the euro zone.
But the latest data for France "add emphasis to the magnitude of the challenge facing the new government to be appointed tomorrow," analysts said.
The Bank of France had previously also forecast zero growth for the first quarter of 2012 and the same for the second quarter. The European Commission is forecasting overall growth this year of 0.5% in France, in line with the budget forecasts of President Francois Hollande, who was inaugurated earlier this morning.
But it is forecasting growth next year of only 1.3%, against a forecast of 1.7% under Hollande's economic programme.
Household consumption was up slightly in the first quarter meanwhile, INSEE said, with a 0.2% rise, compared to a 0.1% increase in the last quarter of 2011. But capital investment fell 0.8%, after growing 1.3% in the fourth quarter.
The country's trade deficit trimmed 0.1 percentage points from overall growth, as imports grew by 0.7%, after a fall of 1.4% in the fourth quarter, and export growth slowed to 0.3%, after 1.1% growth in the fourth quarter.
"Production is idling" and "consumer spending is sluggish," INSEE noted. Production of goods and services was "quasi-stable" in the first quarter, it said, and was up 0.1%. Manufacturing production was down 0.8%, but energy production was up 2.1%. Services production was up 0.2%.
Hollande sworn in as new president
Francois Hollande was sworn in as president of France today with a solemn vow to find a new growth-led strategy to end the crippling debt crisis threatening to unravel the euro zone.
After brief ceremonies and a rain-lashed walkabout, the 57-year-old Socialist headed to Berlin to confront Chancellor Angela Merkel over their very different visions as to how to save the single currency bloc.
Mr Hollande's plane was hit by lightning shortly after takeoff and returned to Paris, but the president left again shortly afterwards in a different jet.
"Europe needs plans. It needs solidarity. It needs growth," Hollande told dignitaries at his new home, the Elysee Palace, renewing his vow to turn the page on austerity and implicitly underlining his differences with Merkel.
"To our partners I will propose a new pact that links a necessary reduction in public debt with indispensable economic stimulus," he told the assembled Socialists, trade unionists, military officers, churchmen and officials.
"And I will tell them of our continent's need in such an unstable world to protect not only its values but its interests."
Hollande also named his new prime minister, Jean-Marc Ayrault, a 62-year-old longtime Hollande ally and the head of the Socialists' parliamentary bloc, who was tipped as favourite.
Ayrault's new cabinet will likely hold its first session on Thursday after which the Socialists turn to their campaign to win a parliamentary majority in June's legislative elections - a key test for the party after Hollande's win.
The new president was welcomed to the Elysee Palace by his predecessor Nicolas Sarkozy, who led him to the presidential office for a private head-to-head and to hand over the codes to France's nuclear arsenal.
Mr Hollande ushered Sarkozy to his car for a final farewell, outgoing first lady Carla Bruni exchanging kisses with Hollande's partner Valerie Trierweiler, elegant in a dark dress and vertiginous heels.
Mr Hollande then signed the notice of formal handover of power - becoming the seventh president of the Fifth Republic and only the second Socialist.
No foreign heads of state were invited to what was a low-key ceremony for a post of such importance, leader of the world's fifth great power.
After the swearing in, Mr Hollande rode up the rainswept Champs Elysees to the Arc de Triomphe in a modest open-topped Citroen DS5 hybrid, a symbolic break with the flashy style of his predecessor.
Soaked to the skin, Mr Hollande laid a wreath at the Tomb of the Unknown Soldier and shook hands with veterans before greeting the sparse crowd of wellwishers who braved the bad weather.
He then visited Paris City Hall, a swearing-in day tradition for the French president, for a ceremony presided over by Socialist Mayor Bertrand Delanoe and attended by the capital's elected and religious officals.
But the real work was to begin after Mr Hollande's second plane arrived for tense talks with Mrs Merkel, the leader of Europe's biggest economy and France's key ally.
Mrs Merkel was a Sarkozy ally and the architect of the European Union's fiscal austerity drive. Hollande opposed the speed and depth of the cutbacks demanded by Berlin, and wants to renegotiate the euro zone fiscal pact.
Germany is committed to budgetary discipline, and Mrs Merkel has repeatedly insisted since Mr Hollande's election that the pact, signed by 25 of the 27 EU countries and already ratified in some, is not open to renegotiation.
But observers say there is room for compromise, with Mr Hollande likely to agree to additional stimulus measures without a rewrite of the pact.
Symbolising the rising pressure on the heads of Europe's two largest economies, Greece was on Tuesday facing new elections after talks failed on forming a government in the debt-wracked country.
The leaders will have to reassure worried markets they can work together after new figures showed France's economy stagnant, with statistics agency INSEE saying it recorded no growth in the first quarter of 2012.
The agency also revised downward the growth figure for the fourth quarter of 2011, to 0.1% from 0.2%, while maintaining that the economy grew by 1.7% overall in 2011.
After the talks with Mrs Merkel, Mr Hollande heads to the United States where he is to meet President Barack Obama at the White House on Friday ahead of back-to-back G8 and then NATO summits.
