France heading for recession

France will head into recession by early next year as rising unemployment and the fallout of the financial crisis prove too much for the eurozone’s second largest economy, the national statistics agency predicted today.

In its twice-yearly economic outlook report, statistics agency Insee forecast the French economy will shrink by a worse-than-expected 0.8% in the fourth quarter, and by another 0.4% in the first quarter of 2009 – two consecutive quarters of economic decline being a common definition of recession.