French economy worse hit by recession than previously believed
France has suffered more from the economic crisis than previously thought, with a “historic contraction” of 3.1 per cent in 2009, according to the Insee statistics office. But industry’s orders rose by 1.7 per cent in April with electronic and optical goods leading the way.
The statistics office lowered its previous estimate of contraction in 2009 from 2.7 per cent to 3.1 per cent on Wednesday, adding that the economy has “not begun to regain ground
lost during the great recession” that began after the collapse of US investment bank Lehman Brothers in 2008.
- Successive crises since then have cost seven percentage points of growth, or 140 billion euros, Insee believes;
- Lost growth will mean a loss of 70 billion euros tax revenue over the next two or three years;
- Two years after coming out of recession, France has only recovered to 2008 levels;
- The manufacturing sector is at five per cent below pre-crisis levels.
In more recent statistics, industrial orders, not counting transport equipment but including
automobiles, rose 1.7 per cent in April after stagnating in March. Electronical and optical goods orders rose 4.2 per cent, with chemicals , textiles and cars all going up over three per cent.
French consumers’ purchasing power dropped 0.1 per cent in 2011, Insee now says, revising its assessment that it had risen 0.4 per cent.
Newly elected President François Hollande has promised to balance France's budget while pushing for policies to encourage growth in the eurozone.