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France's economy slipped into contraction in Q1

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Consumer spending was lower than had previously been estimated, which pushed the economy into contraction

The French economy contracted 0.1% in the first quarter from the fourth quarter last year, statistics office INSEE has said, a downward revision from its previous reading of zero growth.

The decline resulted from lower consumer spending than initially estimated, in particular on fuel after the surge in energy prices since the war in the Middle East, the agency said.

Household spending slipped 0.2% overall, after rising 0.3% in the previous quarter.

The data puts further pressure on the government as it scrambles to cut billions of euros in spending to reduce a public deficit that stood at 5.1% of GDP last year - well above the eurozone limit of 3%.

France also awaits a sovereign credit review from Standard and Poor's today, which cut its rating to A+ last October on risks that government spending would remain high.

Most economists expect S&P to maintain the rating for now despite the growing headwinds as the Mideast war enters its fourth month, keeping oil prices well above the levels seen at the beginning of this year.

INSEE also reported that consumer spending fell a further 0.5% in April from the previous month, while in May, inflation accelerated to 2.4% after 2.2% in April.