French Statistics Office Forecasts 0.1 Percent Contraction Of Country's Gross Domestic Product

October 3, 2008 12:04 p.m. EST

Paris, France (AHN) - French Finance Minister Christine Lagarde has practically admitted France has entered into a recession, although she tried to avoid the word.

As she awaits the third quarter report, Lagarde acknowledged the threat of a recession is real as she expected a second consecutive quarter of negative growth rate. For the second quarter of 2008, France registered an economic contraction of 0.3 percent.

France's national statistics office, INSEE, forecasts a 0.1 percent economic shrinkage for the third and fourth quarters of the year. Even French President Nicolas Sarkozy has admitted the nation is entering a recession phase.

But INSEE head Eric Dubois, like Lagarde, avoided using the word recession, yet. "The term that we are using is growth which is coming to a halt. Saying that there isn't any growth seems like a strong enough message to us," Dubois told BBC.

Even European Central Bank head Jean-Claude Trichet refused to use the term recession on France and the euro zone's slowdown. "ECB experts tell us we have slowing growth. I will not use any word other than that - slowing growth with significant risks growth may become even weaker," Trichet explained to BBC.

A European financial gathering on Saturday in Paris may help the host nation and the EU as well better understand what are the real states of the French and EU economies.