France reports zero second-quarter GDP growth

By @ibtimes on

French economic growth ground to a halt in the second quarter of 2011, raising pressure on President Nicolas Sarkozy to cut spending and abolish tax breaks ahead of elections as he tries to convince nervous financial markets that he will deliver on debt reduction targets.

France's statistics office said economic output, as measured by gross domestic product, was zero in the April-June period versus a first quarter that, at 0.9 percent, was the best in almost five years.

The main cause was a drop in household consumption, which was down 0.7 percent from the first quarter.

Economists polled by Reuters had on average predicted a rise of 0.3 percent and some economists had said as market sentiment turned against France this week that the GDP result could even have hit zero in the second quarter.

Sarkozy said following emergency talks with key ministers on Wednesday that further steps would be considered to ensure that France made good on its deficit-reduction targets, which depend on GDP results in coming years.

(Writing by Brian Love; Editing by Kim Coghill)

Join the Discussion