From the latest GDP report (another estimate of 4Q12):
In 2012 Q4, French gross domestic product (GDP) in volume* stepped
back (–0.3%), after +0.2% the previous quarter.
Over the year, GDP
growth was null in 2012, after +1.7% in 2011.
In 2012 Q4, total domestic demand (excluding inventory changes)
weighed down on GDP growth: –0.1 point after +0.1 point. Indeed,
households’ consumption expenditure remained sluggish (–0.1% after
+0.1%) and gross fixed capital formation (GFCF) continued to decrease
(–0.8% after –0.4%). Exports decreased in Q4 (–0.6% after +1.0%), but
less strongly than imports whose decline increased (–1.2% after –0.2%):
ultimately, foreign trade balance contributed again positively to GDP
growth (+0.2 point after +0.3 point). On the contrary, changes in
inventories continued to weigh down on GDP growth in Q4: –0.4 point,
after –0.2 point the previous quarter.
The overall data is extremely disappointing. First, 2012 saw no growth. And while the economy grew 1.7% in 2011, that was largely due to a big bump in the first quarter of 2011. Take that out, and you have two years of near stagnation in GDP.
Also look at the breadth of the problem. Consumption dropping .1%, investment decreased .8% and exports decreased .6%. Put more generally, all major private sector contributors to GDP dropped in the 4th quarter.
This is not a good report and indicates the economy is in serious trouble.