The French economy is set to contract in the third quarter of 2012, the French Central Bank said Monday. This would be the second consecutive quarter of contraction for the EU member and the third consecutive that sees no growth.
The French economy’s growth stalled in the first two quarters of 2012. The Banque De France said in a statement today that it maintained its expectation of contracting growth in the third quarter. It forecasted a contraction of 0.1% compared to the second quarter.
The country could risk entering recession if the fourth quarter follows suit with the third, as economists define a recession as two quarters of contracting GDP.
National Institute for Statistics and Economic Studies expected the French Economy to grow by 0.2% in 2012. However this assumption was based on its forecast that the French economic growth would stall in the third quarter (after stalling in the first two as well). “GDP should be stable once again in Q4, in line with the low level of business prospects. Over the year as a whole growth should stand at 0.2%,” the institute said on its website.